Trendspotting: Millennials Turn to Online Car Dealerships

NewsWire: 7/10/21

• The market for used cars is booming, particularly online. Millennials are spurring a broader shift away from dealerships and towards sites like Carvana and Cars.com. (The New York Times)
• NH: According to J.D. Power, Millennials accounted for 32% of all car sales in 2020. That’s the largest share of any generation. And as reported by Cars.com (CARS), Millennials were two times as likely as Boomers to buy a vehicle online. 
• At first glance, this may seem puzzling. Millennials have never been a car-crazy generation. To most of them, a car is just an appliance--like a washing machine.
• But I’m not surprised they currently make up the majority of buyers. They too have to get around. Many Millennials are now in the phase of life where they are settling down in the suburbs or starting families. The next step is buying an affordable used car. 
• As for their affinity to online dealerships, this makes sense as well. Millennials don’t like uncertainty or negotiating. To them, the song and dance of the traditional car salesperson is awkward and stressful. Carvana (CVNA) and Cars.com allow Millennials to bypass the situation altogether.
• Additionally, these online dealerships are selling used cars, which Millennials think are more affordable. Ironically, the used car market is red hot, and these “cheaper” buys have never been more expensive. Nevertheless, Millennials keep buying. And more and more online used car startups are popping up. 

Did You Know?

• Welcome to the Hybrid Office. According to a new CNBC survey of top executives at major U.S. companies, the hybrid work model is here to stay. In the second half of 2021, under half (45%) of companies expect to blend in-person work with remote work, while about a third (32%) will be “in-person first.” Only a small share of companies (less than 10%) said that they will go fully remote. With hybrid work, don’t picture a 50/50 split: A similar survey from HR consulting firm Mercer found that it’s most common for hybrid work models to allow remote work only one to two days a week. As we’ve pointed out before (see “The Looming Battle Over Remote Work”) , the degree to which employers have embraced telecommuting varies by industry. Most notoriously, Wall Street titans like JPMorgan and Morgan Stanley have declared that employees better be back in the office five days a week, which their more flexible competitors are hoping will give them an opening to poach their talent.