Automakers May Find Silver Lining In Pandemic

Over the course of the year, car shoppers have delayed but not canceled their purchases, shifted from public transit and ride-hailing toward vehicle ownership, and have embraced online car buying.

All those things spell out a silver lining to the pandemic for automakers, according to Car Gurus.

Automakers were already offering more and more online tools to sometimes reluctant consumers. But COVID-19 had forced all of us to re-evaluate the risks of all kinds of shopping, including for big purchase items like cars. 

As a result, consumers are getting more comfortable with the processes, which can only spell success for the automakers that have equally embraced them. 

Before the pandemic, 35% of respondents said they were open to buying a vehicle online -- a percentage that has increased to 60% as of the most recent November research. This openness to buying online has not wavered since June (60%) or April (61%), despite dealerships reopening across the country.

When coupled with the automotive industry's current high demand and low supply, it is likely for these trends to continue into next year, according to "CarGurus COVID-19 Sentiment Study: How the Pandemic Impacted Automotive Sentiment in 2020." The global online automotive marketplace recently released the report that examines how auto shoppers have responded to the pandemic. 

The November research benchmarks and compares previous CarGurus studies that were run in April and June and explores topics such as vehicle inventory, affordability, digital retail and ride-sharing/public transit.

While the pandemic has disrupted vehicle production, buyers have had different perceptions of price and selection, depending on the months when they bought.

Those who bought a vehicle from March through June were nearly twice as likely to say prices were much lower than expected, when compared with those who bought from July through November (31% vs. 16%).

These earlier shoppers also noted better vehicle selection on dealership lots, with 8% of those who bought from March through June saying vehicle selection was worse than expected and compared to 17% of buyers from July through November.

As the pandemic continues, comfort and familiarity with online shopping tools have grown, and shoppers are increasingly considering digital retail options when looking for a vehicle.

However, even though shoppers are becoming more open to digital retail, only 41% would prefer to buy a vehicle in this manner. In particular, shoppers are more likely to prefer online price negotiation (61%) and online financing (52%).

The pandemic has disrupted many facets of people's lives and that includes how they travel from place to place and how they view vehicle ownership.

As of November, 34% of previous rideshare users and 45% of public transportation users expected to decrease or stop their use of these services. This has remained fairly consistent over the course of the pandemic (39% in June, 39% in April for ride sharing; 45% in June and 44% April for public transportation).

Vehicles offered people an entertaining diversion during the pandemic, with 47% using their car more for road trips or longer drives, and 43% agreeing that they see their cars as a source of escape during this time.

Who would have thought a year ago that driving to a doctor’s appointment or to a store or restaurant for curbside pickup would be our ideal of fun?  Let's hope 2021 brings some new alternatives. 

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