When Shopping for Used Cars, Millennials Are Going Online

One of the most remarkable trends in the past decade has been the growth of an online re-sale market that has shaken up traditional retail and created new markets for used goods. Where shopping for used goods once meant a trip to the local second-hand store, pawn shop, or used car lot, smart shoppers can now find lower prices online, and with the explosion of new peer-to-peer markets now reaching the automotive industry, many indicators suggest that the next sector to be affected by this creative disruption will be used car sales.

This movement has in part been driven by the explosion of online classified ads and websites catering to people who want to buy or sell used goods. Classifieds were traditionally printed in newspapers, which required interested buyers to make a laborious and painstaking manual search. Because the Internet has made it possible for interested shoppers to search for specific items in a specific area and find hundreds of matches instantaneously, online classified sites have now become more like regular online retailers, and where re-sellers once acted as a go-between, purchasing used goods and then marking them up for sale in their own shops, online classified sites have removed these middlemen from the equation, allowing buyers and sellers to interact directly.

For Millennials, who grew up using these kinds of online marketplaces and generally feel more comfortable than earlier generations making large purchases online, using online classifieds to find used vehicles is a natural progression — especially considering that, due to a range of economic factors, Millennials tend to have less money than their parents.

The most recent data suggests that Millennials are also much less likely to feel comfortable shopping for a used vehicle at a dealership, and would much prefer to buy or sell from home, even if that means having to forego a test drive. According to V12 Data, 56% of Millennials said they would rather be cleaning their home than visiting a dealership, and 54% said their preference would be to conduct auto purchases and sales from home rather than going through a dealership or used car salesperson.

For used car lots, this presents a fairly stark picture. But as with every other new communications tool that drives innovation and development, the Internet is also providing a wide range of opportunities for ordinary people who want to save time and money while shopping for used vehicles. As with other marketing advances that make products more affordable, the money Millennials save on used vehicles will likely simply get spent elsewhere, further stimulating the economy and providing an impetus for further innovations.

Perhaps one of the greatest impacts of the Millennial shift toward purchasing used cars online will be felt further down the road, as automotive companies themselves realize that the peer-to-peer model represents an extremely lucrative efficiency in supply-chain management. With more customers choosing to buy directly from each other, it is entirely possible that the Millennial generation, who are only just beginning to shape how the markets of the future will work, will see the end of the dealership model altogether.