Introduction

The Australian car market is changing fast, and young buyers are leading the way. According to the ABS, “Gen Y and Gen Z make up nearly 40% of the population.” But here’s the problem: many of them avoid car dealerships. Why? They don’t fully trust the process, and that hesitation is costing sales.

In 2023, 1.21 million new vehicles were sold, with that number climbing to a record 1.23 million in 2024. But the FCAI reported only 608,811 new vehicle sales in the first half of 2025, showing the market may not match last year’s record. The rising cost of living, interest in greener options, and stories of pushy salespeople add to buyer doubts.

The good news is that younger buyers live online. SproutSocial shows Australian Millennials had the highest “social shopping” engagement, closely followed by Gen Z. Platforms like Instagram, TikTok, and Facebook are where they compare, research, and even buy cars. Being active on social media isn’t optional anymore; it’s where trust is built. More relevant ads equal fewer wasted clicks and in the car game, that can mean lower CPL and better leads.

About Gen Y and Gen Z Buying Patterns

Tech-savvy: Gen Y grew up with the internet, and Gen Z has never known life without smartphones. They expect “omnichannel” experiences. These are a smooth mix of online and in-person experiences, like browsing online and sealing the deal at the dealership. AI tools like ChatGPT are pushing those expectations even higher.

Budget-conscious: Facing cost-of-living pressures, budgets matter more than ever. Around 65% of first-car buyers still want new cars, but some Gen Z buyers won’t spend more than $30,000.

Eco-minded: Both groups care about sustainability. Around 6-7% of each already own an EV. Many others lean toward hybrids or fuel-efficient models.

Rapid response times: Gen Y and Gen Z expect quick replies, often within hours. If they don’t hear back within 24-48 hours, they’ll “ghost” the dealership and move on.

Less brand loyalty: Unlike older buyers, these groups aren’t tied to legacy car brands. They focus on value, features, and reviews. Gen Z, especially, switch brands based on social media feedback.

Life-driven decisions: Life moments spark purchases. Gen Y may buy cars for milestones like new jobs, marriage, or kids. Whereas Gen Z often buys for freedom and independence.

Knowing these traits helps dealerships pitch smarter and rebuild trust with Gen Y and Z car buyers.

Top 7 Barriers Gen Y & Z Face in the Car-Buying Journey.

For Gen Y and Z car buyers in Australia, trust doesn’t come easily. They’ve grown up hearing about untrustworthy dealerships with hidden fees, and they carry that scepticism with them. Let’s break down the main barriers:

#1 Pushy sales tactics

Young buyers hate feeling pressured. They want time to research and decide on their own. Stories of pushy salespeople or sneaky upsells leave a bad taste, and once trust is lost, it’s hard to win back.

#2 Digital disconnect

These buyers research online first. “72% check reviews before visiting a dealership.” If the dealership’s website lists the wrong prices or their service is slower than what’s promised online, trust breaks. They expect the process to be as smooth as shopping on Amazon or watching Netflix.

#3 Past reputations

One bad review can spread like wildfire on TikTok or Twitter/X. Older scandals, like inflated sales numbers, also stick in buyers’ minds. Research shows it takes 10-12 positive reviews to cancel out one negative review.

#4 Affordability barriers

Cars are expensive, and young Aussies are already stretched. Finder’s 2024 survey revealed that 23% of millennials and 26% of Gen Zs have car loans. Compare that to just 7% of Gen X, and it’s clear why finances are a pain point. High fuel prices and unclear finance deals only make things worse.

#5 Values misalignment

Sustainability matters. Buyers want options like EVs, hybrids, and fuel-efficient models. If dealerships look out of touch or ignore eco-friendly options to sell their petrol-powered models, younger customers look elsewhere. Usually, to influencers that they trust more.

#6 Process friction

Long waits, repeated paperwork, and clunky handovers frustrate digital-native buyers. Gen Z is swift to “ghost” if the experience feels outdated. About 75% worry about being taken advantage of online, which shows just how fragile their trust is.

#7 Lack of personalisation

Generic OEM pitches don’t work on Gen Y or Z. They want cars that fit their lifestyle and personal goals, not one-size-fits-all ads.

Bottom line: Car dealership trust issues in Australia aren’t about one single thing. It’s a mix of sales tactics, digital gaps, money stress, and outdated processes. To win younger buyers, dealerships need to address each of these head-on.

For more on how digital-first dealerships can win back younger buyers, explore our services.

The power of social media in winning back trust

If dealerships want to connect with Gen Y and Gen Z car buyers, they need to be active on social media. Platforms like TikTok, Instagram, and Facebook are no longer just for entertainment. They’ve become search engines, review sites, and digital showrooms all in one. Australians spend nearly 2 hours a day on social platforms. That’s where younger buyers are making decisions about cars, long before they talk to a salesperson.

For dealerships, the smart move is investing in social media car ads in Australia. This generates leads and rebuilds credibility with buyers who live online. Traditional advertising alone doesn’t cut it anymore. Younger buyers are sceptical of polished ads. They want authentic content that feels real. A simple TikTok showing a behind-the-scenes test drive, or a customer sharing their first impression of an EV, builds more trust than a glossy brochure. Short-form video is especially powerful. It lets dealerships show features, answer FAQs, and share customer stories in a way that feels personal and honest.

The interactive nature of social platforms also breaks down trust barriers. Live Q&As, polls, and instant messaging turn a passive audience into active participants. This two-way communication shows buyers that dealerships are listening, not just selling. Targeted ads make the impact even stronger. Dealerships can speak directly to their local community, tailoring offers to buyers in their own postcode.

When done right, social media generates leads and builds credibility over time. They allow dealerships to highlight eco-friendly vehicles, explain finance options clearly, and share the human side of their team. In an industry where hesitancy is high, social-first strategies hold the key to rebuilding car dealership trust.

The Importance of testimonials

Word-of-mouth has gone digital. For Gen Y and Gen Z car buyers, trust often comes from Google Reviews, TikTok videos, and Instagram reels rather than from a salesperson’s pitch. A single five-star review on Google or a customer’s TikTok showing their first drive in a new car can reach thousands of people within hours. For younger buyers who hesitate to visit dealerships, this kind of peer validation carries more weight than traditional ads.

The numbers prove it. 84% of buyers see reviews as a crucial part of their decision-making process. Young customers want to hear from people like them. This can mean friends, family, or strangers who have already bought. This is why dealership trust issues don’t just fade with a nice ad campaign; they’re rebuilt when real buyers share positive experiences.

One authentic testimonial can influence dozens of hesitant buyers. That’s why dealerships should actively encourage happy customers to share feedback. A gentle nudge to leave a Google Review, post a short TikTok, or tag the dealership on Instagram can multiply reach far beyond one sale. According to Dealers United, car dealerships with 4.5+ star ratings or more get 70% more leads than those with lower scores.

The flip side is also true. Negative reviews spread quickly and stick around. That’s why car dealerships need a clear review management strategy. They should reply fast, thank positive reviewers, and address issues ASAP. In today’s digital car-buying journey, testimonials are the foundation that shapes reputation, drives trust, and ultimately, achieves sales.

The role of transparency and education

Nothing kills trust faster than hidden costs or vague promises. Younger buyers have grown up comparing prices online and fact-checking brands in seconds. If a dealership doesn’t clearly explain finance options, EV range details, service costs, or warranty coverage, buyers will move on to someone who will.

This is where transparency becomes a competitive edge. Instead of waiting for questions, dealerships should publish information upfront. Show finance structures without the fine print. Show real-world EV range data, not just the optimistic manufacturer numbers. Be honest about servicing costs and include what’s covered. When buyers see clear answers, they feel respected, which builds confidence.

Education is just as important. Gen Y and Z don’t want the “hard sell.” They want guidance that helps them make the right choice. Dealerships can use blogs to explain topics like “How to choose between a hybrid and an EV,”. They can post Instagram carousels comparing models in bite-sized visuals. Or create FAQs on websites to answer common concerns about servicing and trade-ins. This shift positions the dealership as trustworthy. According to Cox Automotive, 66% of car buyers are more inclined to purchase from a dealership when they find its online educational content helpful.

The long-term payoff is huge. A dealership that invests in clear information and buyer education builds credibility and authority. As they become a trusted advisor, that trust leads to repeat business, referrals, and positive reviews. Educating may be the single best way to rebuild confidence and attract new customers.

Personalisation at scale: Tailor the Car-Buying Journey

For Millennials and Gen Z, one-size-fits-all marketing feels outdated. They want a personalised car buying experience that’s similar to how Netflix recommends the next show and Spotify curates playlists that fit their mood. Car dealerships must bring the same level of personalisation to the buying journey if they want to capture attention and build trust. They can use, say, Google Ads for this. When properly optimised, pay-per-click (PPC) campaigns have conversion rates 8% higher than industry averages.

The key is using CRM systems and remarketing. With the right setup, dealerships can send tailored offers to different buyers. A first-time buyer might see finance options with low deposits, while a growing family might get bundle offers for SUVs, servicing, and accessories. Instead of blasting the same message to everyone, dealerships must provide what’s relevant to each buyer at the right time.

Timing is equally crucial. Younger buyers expect quick replies, often within hours, not days. If they don’t hear back quickly, they’ll move on to a competitor. Direct Connect studied Australian and NZ dealerships and found that the average lead response time to online queries is 12 hours 45 minutes, but 50% of customers buy from the company that responds first. Automated tools like instant SMS confirmations or follow-up emails help to keep buyers engaged. Even a quick “Thanks for your enquiry, we’ll be in touch soon” makes a buyer feel acknowledged and valued.

Dealerships can also stand out with videos. Imagine a salesperson sending a short, personalised walkaround video of the car a customer just enquired about. This not only answers questions but builds rapport, even before the buyer sets foot in the showroom.

Personalisation at scale is more about mixing data with empathy. By using CRM insights, quick follow-ups, and creative touches, dealerships can make every buyer feel valued. For hesitant Gen Y and Z shoppers, that extra effort helps build trust. In turn, that turns enquiries into long-term relationships.

Case study: Reinventing the approach for a NSW car dealership

Results at a glance

75 leads in under 7 days
3 car sales in week one
$0.85 cost-per-click (CPC) across campaigns
$25.57 cost-per-lead (CPL) on the top-performing ad

This well-known NSW dealership had a tough brief: launch without a physical showroom, hit ambitious sales targets, and build a brand from scratch. With a $100k budget and limited time, traditional marketing wasn’t an option.

Ignite Group flipped the script. We developed a digital-first strategy targeting Gen Y and Z buyers. Instead of waiting for customers to come in, we leaned into online behaviour with hyper-targeted campaigns across Sydney’s eastern suburbs. We built a multi-platform push across Meta, Google, TikTok, and Spotify. The content included high-impact videos, reels, and carousels. At-home test drives, instant lead forms, and fast follow-ups ensured no opportunity slipped away.

Leads poured in within days and sales closed in the first week. This dealership proved you don’t need four walls to succeed, just the right mix of storytelling, targeting, and speed. Most importantly, the campaign directly addressed the biggest trust barriers for Gen Y and Z: convenience, transparency, and quick responses. This proves that dealerships that address trust issues of young buyers can turn hesitancy into sales.

Looking ahead: What dealerships must do

Since 2014, Ignite Group has helped 150+dealerships across Australia and New Zealand generate 1 million+ leads. Our work shows one clear trend: Gen Y and Z want digital-first, transparent, and personalised experiences.

That’s why we design strategies that help future-proof dealerships. Whether it’s a Meta ad, TikTok reel, or Spotify commercial, we ensure the message is consistent and trustworthy. Our creative team understands how to reach potential car buyers in their primary market areas (PMA). Our targeted social media car ads in Australia help turn hesitant buyers into loyal customers.

The dealerships that adapt now will win the loyalty of Gen Y and Z for years to come. We’ve proven that social-first campaigns and tailored dealership marketing strategies are what it takes to win back young buyers. Ready to turn them into customers? Let’s talk.

Email: info@ignitegroup.com.au | Call: Dean on +61 419 642 530

The rise of the hesitant buyer: why Gen Y and Z don’t trust Australian car dealerships