When discussing trends in auto repair, it is important to take a look at the actual drivers behind the wheels. How do these consumers make purchases and how do they view the repair industry overall?
You can't run an auto shop without the people who support your business. People come in all shapes and sizes, but truly understanding the psychology of your customers/potential customers are key to building a strong lead. Every generation is different, so you need to know how to market to every genre. Here is everything you need to know about the various consumers at your auto shop.
There are approximately 214 million licensed drivers today with 1.18 cars per driver. This means that there are 272 million vehicles on the road today. These drivers range from millennials to baby boomers and vary in both driving experience as well as buying preference.
While auto shops service cars for many reasons, one of the largest is collision repairs. According to the National Highway Traffic Administration, car accidents happen every minute of the day. There are approximately 5.25 million driving accidents that take place each year.1 When car repairs due to car accidents are added with normal, wear and tear repairs - the need for auto mechanics and shops is great.
When it comes to car buying, differences in generation really makes an impact. Baby Boomers, for example, tend to go with the “traditional” buying experience. They prefer to actually visit a dealership and spend the day test driving multiple vehicles before making a buying decision. NADA research shows that the average age of new car buyers is 51.7 and Baby Boomers account for 62 percent of all new car sales.2 This makes sense for the fact that this generation has had more time to establish credit and have a longer work experience and better overall financial profile.
We all know that Gen Xers (those born from the early-to-mid 1960s through the late 1970s and early 80s) are buying cars. At this stage in their life, they have “greater purchasing power now and value practical luxury and safety features for their families.” They tend to prefer practical, safe, family-friendly vehicles that are larger and roomier.3
These differences in car buying habits ultimately affects auto repair shops for the type of cars that are coming into the shop as well as the type of customer. One generation that has really started to make changes in the auto industry is the millennial generation - for many different reasons.
You may have heard that millennials aren’t buying cars and there is a reason for that. In 2015, reports came out that this generation was not buying cars. But since that time, the statistics have changed drastically. Millennials are buying cars - it just took them a little longer to get there. While overall, baby boomers are buying the largest percentage of cars, in some states millennials are actually buying more than baby boomers.4 They are also going to keep buying cars: 80 percent of millennials plan to buy a new vehicle within the next five years.5
The most important factor to take into consideration when thinking about millennial buyers, is that they are buying cars - they are just buying differently. Millennials were the first generation to grow up with the internet, and for this reason they do not hesitate to visit the internet for car-buying research. In other words, this unique group of buyers is highly educated on exactly which car model they are interested in purchasing, before they actually visit the dealership. Millennials also have access to online reviews of vehicles, which doubles as a referral.
One reason that there is a growth in the number of millennials buying cars has to do with the fact that they’re not as young as they used to be. As millennials get older, many start families. Like the generations before them, this means that many now need a car to transport their family and get them to and from work. Also, years of higher gas prices and economic downturn (when many millennials were graduating college) helped keep millennials from buying cars. Pair that with rising tuition costs and many leaving college with thousands of dollars in student loans, it is no wonder that many millennials waited before buying a car.
When it comes to millennials and auto repair shops, the majority of millennial drivers most likely don’t have that “go-to” mechanic like their parents do. According to a AAA survey, baby boomers (76 percent) are more likely to have a chosen auto repair shop that they trust, compared to millennials (55 percent) and Gen Xers (56 percent).6
Since these millennials are such a large percentage of drivers today and many times they don’t have a go-to mechanic, they are the perfect generation for your auto shop to target. But keep in mind, these drivers are spending their time online so you must be marketing your shop on the internet.
Buying Patterns by Generation
Like previously discussed, with the rise of the internet, people are more and more likely to do online research before buying a car. In 2016, 76 percent of all car buyers used the internet to shop and research.7 That percentage was even higher for millennials - 88 percent used the internet when buying a car.
Though car buyers of all generations rely on word of mouth, more and more often these days, that word of mouth is coming from online reviewers. In that same study, 17 percent of millennials called referrals the most influential source that led them to a car dealer, while 55 percent called the internet the most influential source.7
Most of this research is done on third-party sites. 53 percent of new car buyers in 2011 said that they used third-party sites; in 2015, that percentage had increased to 66 percent.7 Though many still use dealer sites to research the differences between makes and models and get pricing information, shoppers turn to these third-party sites for reviews and to help learn about pros and cons for each type of car.
Computers remain the most used device for heavy-duty research like shopping for cars. 82 percent stated that they used a computer to shop - but 42 percent used two or more devices, meaning that they also used a tablet or smartphone. For millennials, that number is higher - 50 percent used multiple devices. This percentage is only increasing as smartphones become more integrated into our everyday lives.
Because of the accessibility of information, car buyers are now making decisions before actually visiting dealerships. According to J.D. Power statistics, in 2016, 35 percent of new car buyers knew the exact model they wanted and bought it (up 7 percent from 2013).8
Similar to how people turn to desktop and mobile for researching cars, people are more likely to use technology to research auto repair shops. The internet is the leading way people find new auto repair shops. For this reason, it is important that your auto repair shop can be found on the internet, and most importantly, in searches around your local area. It is crucial for your website to have a mobile-friendly website that uses local search engine optimization best practices. It is also important to have online directory listings where potential customers can read reviews. The internet is your secret weapon.
Every person is different and enjoy different buying experiences. When discussing trends in auto repair, it is important to take a look at the actual drivers behind the wheels. So be sure to focus on the consumers, their purchases. and how do they view the repair industry overall.
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