Conventional wisdom would suggest that Millennials are more interested in cellphones than cars, that they’d rather walk or bike, or at least stick to mass transit, rather than planting a vehicle in their driveways.
If a new study by Enterprise Holdings is any indication, conventional wisdom – as is often the case – needs to be stood on its head. The study finds 91% of Millennials calling it extremely or very important to own a vehicle, whether to commute, run errands or simply enjoy their lifestyle.
Perhaps not surprising, considering the source, the study indicates that Millennials are turning to rental cars as an alternative way to go for a test drive.
“When we provide our customers with a great rental experience, it doesn’t just keep them coming back to us – it clearly sends many of them into their local dealer showrooms, as well,” said Kurt Kohler, senior vice president of fleet operations for Enterprise Holdings, which is parent to the Enterprise, National and Alamo rental brands.
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While some observers may be skeptical, and question the potentially self-serving merits of the Enterprise study, there’s a growing body of evidence suggesting that Millennials aren’t content to just sit in their parents’ basement testing. Data analyzed by J.D. Power and Associates, for example, found that Gen-Y currently accounts for about 27% of new car sales in the U.S. And that’s expected to grow, with Millennials overtaking Baby Boomers in the next decade.
When both Boomers and Millennials were included, 92% said they thought it very or extremely important to own a car. Curiously, that’s a big jump from the 73% positive response to the same question posed in 2013 by Enterprise. While the company doesn’t explain the surge it could reflect improve economics for Gen-Y whose cohorts were disproportionately his by the Great Recession.
Over a quarter of those surveyed – 27% overall – said that a positive rental experience started them car shopping. And, said a statement from Enterprise, “The younger the customer, the more likely they are to say a positive car rental experience triggered them to start shopping for a new car.”
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According to the study, 32% of Millennials went looking for a new car after a good rental experience compared to 30% of Gen-Xers and 23% of Boomers.
That’s likely good news for automakers on several fronts. In today’s crowded and highly competitive market they’re always looking for alternative ways to connect with potential buyers. They’re also always trying to justify putting cars in low-profit rental fleets. Usually, that’s just a way to keep factories humming when retail sales are slow. Now they can claim that it’s all part of marketing, as useful as those costly Super Bowl commercials.
Incidentally, 45% of those surveyed said that rental cars gave them their first experience with the new technologies rapidly coming to market. Traditionally, manufacturers tend to send companies like Enterprise their base models. This might suggest that, going forward, they start using higher-trim versions in rental fleets to show off their hottest new technologies.
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Car ownership doesn’t have much to do with “conventional wisdom”. What was being reported by some surveys and auto makers was that Millennials were more interested in electronic toys than car ownership.