Throughout the pandemic, CarGurus has kept a pulse on consumer sentiment around car buying through its Covid Sentiment Study. The Q3 edition, which surveyed 503 Canadian consumers in July, found good news for dealers: consumer confidence is up 21 percentage points. Seven in ten (74%) say the pandemic did not negatively impact their ability to afford a vehicle today, vs. just five in ten (53%) in June 2020.
However, the pandemic continues to have a lasting impact on the industry, shaping attitudes around car buying. Below, we explore which trends are temporary and which are here to stay.
Short-term takeaways
While the pandemic caused a huge industry-wide disruption in 2020, we’ve seen buyer demand for vehicles bounce back quickly and consumer confidence return as spending decreased during the full and partial lockdowns. The pandemic even sparked new interest in purchasing a vehicle, with almost a third (31%) of 2021 buyers saying the pandemic made them more interested in buying a vehicle. This was likely a result of more people moving, getting new jobs, and beginning to work from home over the past year.
Today’s buyers are much more comfortable than last year with shopping in stores, too; however, they still expect dealers to provide a safe experience. Over half of buyers still expect face masks (59% for employees, 57% for customers) and surface cleaning (54%).
Long-term takeaways
Since the start of Covid, use of shared transportation has taken a hit with consumers growing accustomed to relying on personal vehicles to replace these services. Only half of previous users plan to resume their pre-pandemic activity with ride-sharing (53%) and half public transportation (54%) in the long term. Instead, more than a third (38%) expect to use their personal vehicles more overall going forward.
Just as vehicle usage has changed due to the pandemic, so have consumers’ preferences around buying a vehicle. Now more than ever, the majority of buyers (63%) would love to do more of the process from home for their next vehicle purchase. Still, some of the most popular contactless services, including dealership appointments and at-home test drives, that arose from the pandemic are likely here to stay to accommodate those that do come into the dealership.
What can dealers do to adapt?
- Prioritize digital retail in your sales process. With most buyers wanting to do more of the process online, it’s important that dealers are equipped to handle these preferences. Implement digital retail products that allow buyers to take the transaction as far as they want – and make sure your staff is trained to handle this new online business.
- Test new ways of acquiring inventory. With demand up and the chip shortage having a global impact on inventory levels, you can’t rely on auctions to keep your inventory stocked anymore. Consider investing in technology that allows you to acquire in-demand vehicles more efficiently in your local market, and perfect your trade-in process to keep your supply of used vehicles up.
- Continue to provide a safe, convenient buying process. The dealership experience is crucial to winning more sales and many buyers expect contactless services to stick around long term. Continue to offer services like dealership appointments, solo and at-home test drives, and at-home delivery to ensure consumers feel comfortable buying at your dealership.
There’s no doubt that the current selling environment will continue to evolve as attitudes and preferences continue to change. But, by identifying processes and services that help you meet consumers’ expectations and increase convenience, you’re sure to get ahead.