Tim Mullins on What Gen Z Really Wants From Dealers

Tim Mullins, Chief Market Officer at Capital One, explores how dealerships can better connect with Gen Z and first-time car buyers as their expectations around digital shopping, affordability and human interaction evolve.

Mullins breaks down new research showing that while younger consumers often begin their vehicle journey online, most still want dealership employees involved at key moments. The conversation examines how retailers can create a seamless experience that connects digital research with in-store interactions without removing the human element.

• Gen Z buying preferences and why a fully digital purchase is less appealing than many dealers assume
• Social media’s role in how younger consumers begin researching vehicles
• Growing trust in dealerships and the importance of carrying the online experience into the showroom
• Affordability concerns, including payments, insurance, fuel and interest rates
• Human interaction and where Gen Z still wants guidance from dealership employees
• Flexible communication across texting, email, online tools and phone conversations

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Transcript

Welcome And Guest Setup

Announcer 0:07

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:11

A new generation of car buyers is entering the market and they expect a very different buying experience than previous generations. Joining us now to share tips on how dealers can better connect with first-time car buyers is Tim Mullins. You've seen him here before on CBT News. He's the chief marketing transformation officer at Capital One. So, Tim, thank you so much for joining us on the show once again.

SPEAKER_02 0:33

Thanks for having us back, Jim. I really appreciate it. I enjoyed our last chat and I'm glad to be back.

Gen Z Expectations Versus Assumptions

Jim Fitzpatrick 0:38

Yeah, for sure. So digital first customer still expects guidance. Do they not? I mean, they're they're it's a it is a whole new generation out there that uh are they're buying cars really for I don't have my phone handy here. I usually pick it up, but uh almost from their phone, right?

SPEAKER_02 0:54

Absolutely. So, you know, just to sort of context set here, uh, you know, we do a car buying outlook every year and we we pull a bunch of customers. We have lots and lots of customers at Capital One. And uh and and this particular topic came up with which is Gen Z. So, Jim, as you know, that that's about age range from 14 to about 29. So think you're in your 20s, you're entering into the car market, you're probably gonna buy your first car. And so for dealers, that's really interesting because that's the next buyer that's gonna be coming

Why Most Won’t Buy Fully Online

SPEAKER_02 1:22

their way. Yeah, and we found some really interesting stats. I think one, just to make it like really exciting, uh, 57% of Gen Z have indicated that they plan to buy a car in the next year. So that's great. Yeah, that's like a good T Right, right? Yeah, yep, that means the wave is coming and that's fantastic. Um, but as you dig into it a little bit, we found some very interesting things. First and foremost, this one was kind of surprising to be honest with you. Only 8% of Gen Z want to shop entirely online, which I actually thought was gonna be the opposite. I thought this was the generation of everything's on my phone, I don't want to talk to humans, right? Yeah, and that's not what we're seeing here.

Jim Fitzpatrick 2:01

And you're saying that when you say shop online, do you mean all the way through to the purchase where it's literally delivered to their home?

SPEAKER_02 2:07

Kind of. So only 8% want to do that. That means 92% don't want to do that. Yeah. And so we found, you know, the kind of the dispelling of that kind of rumor that had been generating where you know dealerships are not you know relevant anymore, which Capital One has always said the opposite to that. Well, this new generation is really enforcing that. 43% of them want that hybrid approach so that you know that give them online what they need, allow them to complete tasks online, but they're still looking for that sort of in-person connection. Sure, sure. And and that makes sense, right?

Jim Fitzpatrick 2:42

I mean, even though we see these um Carvana car commercials where people are taking delivery, you know, right right at their front door or what have you, there's a segment of the market that will do that. As you just mentioned, it's probably 8% uh or or around there. But I think the vast majority people still want to use the showroom for that confirmation and affirmation on the deal that they just uh studied for the last number of days online, right? And um and I think that's where the I don't know that the showroom will ever be replaced.

SPEAKER_02 3:14

I don't think so either. You know, now some of that online uh those trends are changing with Gen

Social Media As The Starting Line

SPEAKER_02 3:19

Z. For example, a lot of them use social media. So when we say online, right, that could mean going to the dealer's website or or or other things, going to a third-party aggregator. Sure. But in this case, 81% of Gen Z said, I started my my journey on social media. And so that was like very alarming to me in a good way, because a lot of our dealers are leaning forward with social media and they're getting in the game for sure. Yeah, but that's a pretty big number for that that population.

Jim Fitzpatrick 3:47

Yeah, no question about it. And I uh it is amazing. Even in the our media business, you know, everything is moving to social media. Uh less and less people are actually going to media websites because of AI, you know, bringing the information right to your fingertips and the on that first search. And uh and and social media plays such a big role in everybody's decision making these days. I mean, it's it's just the one of the biggest driving influencers out there, right?

SPEAKER_02 4:15

Yep. So that that should reinforce the dealerships who are listening. That you know, that should reinforce their their investment into that medium, right? Like they that's a huge wave coming.

Jim Fitzpatrick 4:24

Yeah.

SPEAKER_02 4:24

Uh and so I think, you know, great, that checks off some things. I think what's interesting though is when you kind of dig deeper a little bit, um, this sort of affordability and trust pattern is coming up, Jim. And

Stress, Affordability, And Rising Trust

SPEAKER_02 4:37

so, you know, what what I found was pretty interesting is uh this is the first generation who has indicated in our polling that a lot of these Gen Z car buyers are sort of confused, frustrated, and stressed more than you know, millennials, you know, Gen X's, and and baby boomers. And so they're looking, they're really looking for the dealership uh to have a trusted connection with them. Uh and and one of the stats that I just couldn't believe, we had to have our analysts look at it again. Jim, you're not gonna believe this. So in 2023, uh we polled uh Gen Z and about 44% of them said I trust the dealer. Okay, so it's a coin flip, that's fine. We re-polled them in 2025, and that shot up to 69%. Interesting. Isn't that interesting? Yeah, that is. So the the things dealers are doing to kind of bridge that gap between online and offline. So you you do a bunch of stuff online, Jim, you complete a bunch of things that you don't want to do in the store. Then when you get into the store, you don't have to just start over. The dealer knows who you are. Yep. They've ingested that info, yep, and these Gen Z people can show up and just do what I call as kind of the fun stuff, like test drive and pick out the color and do the thing that you want, right?

Jim Fitzpatrick 5:55

And so that's shot trust up pretty big. Isn't that interesting? That is interesting. It's good news too. You know, it's uh I thought for a minute there you're gonna say it's it went lower, but uh so that's um that's you know leaves a lot of hope for dealers out there that maybe we are doing a good job with customers after all. So um helping first-time buyers navigate the cost of ownership is a big thing, especially you know, with dealerships and dealer uh staff today, because the cost is so astronomical in so many

Explaining Total Cost Of Ownership

Jim Fitzpatrick 6:26

cases. Um, average price of a new car being fifty thousand dollars, which is before gas and before insurance and any kind of maintenance on the car. So a big chunk of uh that first-time buyer's income is going just to pay for an automobile, which it that chunk is bigger than it's ever been before. Talk to us about that.

SPEAKER_02 6:45

Yeah, so I think uh, you know, the key here is like these macroeconomic um, you know, factors that are that are you know that are influencing our business. You know, these things are some something you and I can't change. Right. And so I think the uh the thing I'm hearing from our dealers is that they are adapting to ensure that they're taking care of these customers. So for example, um, no surprise, transparency is a huge deal. Yeah like these customers do not want to come into the store having done a bunch of stuff online and just sort of be shocked with a completely different deal. Right. Like that is you're gonna be in the other side of that trust factor, right? That's right if we do that. That's right. Um, so you know, general transparency is important. We're also starting to hear a little bit, and this is the first time I'd heard this, Jim, but we're starting to see a little bit of Gen Z customers are looking at the entire ecosystem of the payment. And what I mean by that is they're starting to factor in insurance to their payment, they're starting to factor in gas to their payment. Interesting. And I've never heard a generation do that, yeah. Yeah, and so a lot of the dealers I'm talking to, sometimes they're having to kind of zoom out and talk about the holistic financial commitment so that Gen Z feels comfortable in what they're getting into, which I thought was really interesting.

Jim Fitzpatrick 8:00

Yeah, yeah, that that is. There's no question. Um, because I don't think I did that uh when I went when I was shopping for my first car. It was just get me in the car, how much of the pavements, I can handle it, and then later on we'll worry about the the rest, right?

SPEAKER_02 8:14

Yeah, it was just what color do I want that Camaro to be, right? That's right.

Jim Fitzpatrick 8:18

That's right, that's right.

SPEAKER_02 8:19

Um so that's what helps with you know kind of that being overwhelmed, being, you know, that stress level, kind of that frustration level. That's what brings things down. So I'm not saying, you know, I'm not I don't think I'm signaling to dealers, start quoting insurance in the final payments, you know, start quoting gas.

Jim Fitzpatrick 8:36

Probably don't want to do that. Yeah.

SPEAKER_02 8:38

Yeah. But don't be shocked if you know the the customer is in the box and they start talking about that. I think it's really just good to sort of think through that. Yeah. That way you're not kind of taken off guard a little bit.

Jim Fitzpatrick 8:48

Yeah, no question. And and maybe, yeah, uh put together some sort of a a comeback to when they say, oh, the you know, the pay, the total payment's gonna be a thousand bucks a month with everything thrown in there. I don't know what that comeback is, but uh be thinking about it to your point,

FTC Pressure And Price Transparency

Jim Fitzpatrick 9:03

right? Um You know, the FTC recently came out and said, hey, you you guys, dealers have got to sit up and fly right with regard to trans pricing transparency. And you know, you if there's a di dock fee, that's gotta be advertised. If there are rebates, um, they can't be crazy rebates that nobody qualifies for. And and uh because consumers today are demanding that they've got that transparency and that they know going in, to your point, before they get to the dealership, what the price of the car is gonna be. And it can't change once they get in there, you know, and um so building trust with affordability, transparency, and then financing education, which is another element. What you know, what is the rate gonna be? How many months can I go or even should I go? Maybe you're approved for 84 months, but you may maybe that's not the best way to go on this vehicle. You know, if you can go another 25 bucks a month, probably better off doing 72 or 60, right?

SPEAKER_02 9:57

Yep. I think what I'm finding when I ask dealers about this, uh I think I think everyone is in different stages. You know, there are some dealers that I talk to who are like, yep, I mean, that makes sense. We're we're pretty transparent anyway. We will you we will be a little bit more transparent to you know to meet the guidelines, but our general strategy and business model is transparency. You know, then other dealers are like, yep, we were already heading in that direction. We haven't made all the changes we want. This sort of nudged us to make the changes. But what I'm finding uh positive out of this FTC guideline you know proposal is that it it sort of brings all dealers to sort of the same level. If everyone has to do these things, then mostly what I'm hearing from dealers is that sounds great. It's when certain dealers have to do certain things and others don't. That's that's when things get tangly. That's right. And so I'm I'm hearing some pretty positive things from our dealers about this, and you know, we welcome that.

Jim Fitzpatrick 10:50

Yeah, for sure. And if they are gonna get tangled, communication with that customer is so vitally important, right? I mean, you gotta let them know that, hey, we just found out that maybe your credit isn't as good as we thought it was. Here's here's the payment based on that. Preferably before they get to the dealership, if you've spoken about payments or you talked about price or what have you, uh, or availability on the car or the trade allowance of so many different elements of a deal. But uh that communication factor is so critical in those early stages. Well, actually throughout the whole stage of a tr of an automobile transaction, right?

SPEAKER_02 11:24

Yeah, absolutely. Uh communication

Gen Z Communication And Phone Preference

SPEAKER_02 11:26

is key. And I think that you know the two things that we're gleaning from the car buying outlook, uh number one is that not all Gen Z customers the same. So um I think the dealer needs to be adaptable if the Gen Z wants to text or just email or whatever, you know, like be adaptable and kind of like build your BDC in a way where they can meet the customer where they are in their preferred communication strategy. That's like one thing.

Jim Fitzpatrick 11:53

Yeah.

SPEAKER_02 11:54

The second one was a little bit um of a surprise to me. Um, kind of like the trust value going up, you know, to 69%. The second insight was we found that Gen Z customers want to talk on the phone. Um, actually a lot. Like 55% of them indicated I like to do stuff online, but I want to talk to a human. And in my opinion, that may be kind of uh kind of an interesting blowback from everything's going AI. This generation's like, yep, I get it. Like, that's fine, but I also want to talk to a human so that I can have my you know questions answered. So they're wanting to talk about what I would consider as like the really important stuff. Yeah when it comes to financing and payment options, when it comes to vehicle pricing, when it comes to like specific vehicle specifications or like warranty options. I find they like to do a lot online. Yeah. And then when they hit a point, they want to talk to a human, and I think that's where that trust starts to surge. Yes. So uh it just an interesting insight of you know what, you may want to go a little old school here and pick up the phone and call these Gen Z customers.

Jim Fitzpatrick 13:06

Isn't that interesting? That that is an interesting stat for sure. Would they settle for an AI sounding uh or a human AI sounding, you know, bot or or chat? Today I can't sometimes I can't tell the difference when I'm calling a I recently called a restaurant and the AI sounded so human. I'm not kidding. For the first couple of minutes or you know, minute or so, I'm thinking, wow, that this per this this AI, if this is AI, this is excellent, you know?

SPEAKER_02 13:34

And it was just amazing. However, you know, the you know, Gen Z's appetite for for AI, but I think um, you know, I think if I if I boil it down to the problem that Gen Z is trying to solve, they are just looking for verification of the important thing they want to talk about. Right. So I'll leave it up to the dealer to interpret what what and how to do that, right? Yeah, um, but I just thought that was a very interesting stat that is again, you know, the world of TikTok, the world of meta, yep. I just didn't anticipate that they wanted to hit a certain point and talk to a human, which for me, I I am not a Gen Z. That's that's great, that's refreshing to me, right?

Jim Fitzpatrick 14:12

Yeah, yeah, that is. That no question. You would think it would be, you know, if you whatever you've got text it text it to me and we'll keep it, you know, on a text basis. In fact, I'm that way. If somebody can, if we can do a deal through text messaging, I'm all about it. You know, or communication on my on the on the service of my car, whatever it is. Sometimes I can't take calls, but I can read a text message. I can reply to somebody. I might be in a meeting or whatever the case might be. Uh, and it just seems like it's so much more convenient. Plus, I always feel like I've got whatever their commitment is in writing right here in the text message, you know, rather than get into a he said, she said later on, you know. But it's nice to it's nice to see that uh Generation Z is more of a I wanna I want to hear your voice, right?

SPEAKER_02 14:55

That is interesting,

How Dealers Can Prepare Now

SPEAKER_02 14:56

right? So, you know, from from like a dealer's perspective, it's good food for thought, meaning, you know, Gen Z is not their dominant customer right now, but it is their emerging customer, right? So you don't want to just completely throw out your business model and adapt to to one generation, right? But it's good to know that these things are coming and like conversations with you, these are perfect because these plant seeds with dealers who can start thinking about okay, once this generation becomes my main buyer, I've already heard about it, I've already thought about it, I'm not shocked by it, right? And it gives them the ability to adapt. And and then, Jim, just so you know, the other side of that coin, we take this stuff really seriously at Capital One. When we build products, when we think through dealer solutions, when we think through you know, what's the best way to augment a dealer's website or what's a new product we want to launch? We really think through are we caring for the next generation that's coming?

Jim Fitzpatrick 15:54

Right.

SPEAKER_02 15:54

So that dealers just have options, right? I think that's what dealers want.

Jim Fitzpatrick 15:57

They just want options. That's right. That's right. No question about it.

Final Takeaways And Sign Off

Jim Fitzpatrick 16:01

Tim Mullins, Chief Market Transformation Officer. You're transforming the way vehicles are being purchased and sold in the United States. So you got a big job ahead of you. But uh, we appreciate you joining us here on CBT News and uh love to do a follow up with you because this this is good stuff. Dealers need to hear more of this for sure.

SPEAKER_02 16:20

Absolutely. It's an absolute pleasure, Jim. Thank you so much.

Jim Fitzpatrick 16:23

Thank you.

Announcer 16:25

Thanks for watching Inside Automotive with Jim Fitzpatrick.