Understanding Purchasing Power and Preferences: Marketing For Growth in Auto

Highlights: 

• Precision Over Broadness: Transitioning from a "one-size-fits-all" approach to data-driven segmentation allows dealers to identify specific geographic and demographic groups with the actual purchasing power to buy, reducing wasted spend and increasing ROI.

• Adapting to Gen Z's Digital-First Pragmatism: As Gen Z's global income approaches $2 trillion, success requires localized, digital-first strategies (like TikTok or YouTube) that emphasize transparency, affordability, and used vehicle options to meet their unique financial behaviors. 

The Problem: When “One-Size-Fits-All” Doesn’t Fit Anyone

In today’s fast-moving auto retail market, understanding your customer base isn’t just helpful — it’s essential. Many dealers and marketers still take a broad approach, casting a wide net with their advertising in hopes of catching as many potential buyers as possible. But this strategy often leads to wasted marketing spend and missed opportunities. However, the power for auto marketing agencies and dealers lies in understanding which specific consumers are most likely to purchase which specific products and what is the most effective way of targeting them.

Two people might be shopping for a new car, but their ability to buy can differ dramatically. A Gen Z college graduate who just landed their first job has different priorities and financial realities than a Gen X professional looking for their next luxury SUV. Without clear insight into purchasing power and wealth distribution across demographic segments, marketing efforts can easily miss the mark.

According to the Equifax October 2025 Auto Insights Report, auto loan originations have stabilized after several years of volatility, but affordability remains a key concern, especially for younger buyers. The average loan amount for new vehicles continues to rise, even as Gen Z consumers, who are now entering their peak car-buying years, look for ways to stretch their budgets.

These young consumers are eager to buy but cautious about overextending financially. If marketers don’t take that into account, campaigns designed for “aspirational” luxury buyers might fall flat with the very audience they’re hoping to reach.

The Opportunity: Gen Z’s Growing Influence

Gen Z is now the most diverse and digitally connected generation in history, and they’re quickly becoming a powerful economic force. According to the Equifax 2025 Wealth Trends Report, Gen Z’s collective income is projected to surpass $2 trillion globally within the next few years. However, their current purchasing power still trails older generations like millennials and Gen X, meaning their financial behavior is distinct.

These younger consumers are value-driven and pragmatic. They care deeply about brand authenticity and social responsibility, but they also keep a close eye on affordability. When it comes to cars, Gen Z buyers tend to prefer used or certified pre-owned vehicles that deliver both reliability and style without breaking the bank.

They’re also digital-first decision-makers. A Google study found that over 80% of Gen Z auto shoppers begin their research online, often relying on short-form video reviews and social media recommendations. That means auto retailers can’t rely solely on traditional media or broad demographic targeting; they need precision and personalization.

The Solution: Smarter Marketing Through Data-Driven Insight

Here’s where data becomes a game-changer. With access to purchasing power estimations and wealth segmentation tools like Equifax IXI™ data, auto retailers and partners can go beyond simple demographics and level up their CDPs to enable sophisticated segmentation. They can understand not just who their customers are but also what they can afford and how they prefer to engage.

Imagine being able to identify neighborhoods where Gen Z consumers with moderate discretionary income are actively shopping for used vehicles under $25,000. Instead of spending thousands on broad national campaigns, you could invest in localized, digital-first strategies — YouTube pre-roll ads, TikTok influencer partnerships, or interactive Instagram stories — designed to meet these shoppers where they already are.

Meanwhile, if your goal is to attract older, higher-income buyers, your strategy might look very different. Traditional channels like direct mail, print ads, and local TV can still be highly effective for these segments, particularly when paired with data-driven insights about their wealth and lifestyle.

By combining these approaches, marketers can stretch their budgets further and see stronger ROI, all while creating a more personalized experience for customers.

Turning Insight into Action

Data-driven marketing doesn’t just help target the right audience; it helps you tailor your message. For Gen Z, that message might emphasize affordability, transparency, and eco-friendly options, such as hybrid or electric models. For millennials, convenience and technology integration might be key selling points. For boomers, reliability and brand reputation might carry more weight.

Using segment-level data, marketers can:

• Identify purchasing power across different geographic and demographic groups.

• Understand shifting consumer preferences, such as the rising demand for pre-owned vehicles and EVs.

• Align inventory and messaging with what customers can realistically buy.

• Deploy the right channels, ensuring every marketing dollar drives measurable impact.

The Payoff: Targeted Growth and Stronger Relationships

Auto retailers who harness this type of insight can do more than just boost sales; they can build long-term customer relationships. By understanding each generation’s financial reality and communication preferences, dealers can speak to customers in a way that feels authentic and relevant.

Gen Z, for instance, values honesty and transparency. Dealers who clearly communicate financing options, total cost of ownership, and trade-in values can win their trust early. That trust, in turn, can translate into lifelong loyalty as these buyers progress through their financial journeys.

In short, smarter segmentation isn’t just about better marketing — it’s about better connections. And in today’s competitive auto market, that’s what drives sustainable growth.

Insights For Action

Auto retailers and their partners have an opportunity to use powerful Equifax data to refine their strategies and reach customers more effectively. By focusing on purchasing power, wealth trends, and generational preferences, especially for emerging Gen Z buyers, you can create marketing campaigns that not only perform better but also truly resonate with your audience.

When you know your customers’ financial realities and communication styles, every dollar you spend works harder. Drive your business further by exploring the monthly Auto Insights Report and find out how to partner with Equifax.