Topic: consumer sentiment
Before the COVID-19 pandemic hit, car dealers were already facing questions about what the future of the industry would look like. With consumers’ preferences changing and advancements in digital retailing strategies continuing to be made, many have been at least starting to think about tactics like online financing and home delivery. But the current health crisis has accelerated many of these trends, and today’s dealers must adapt to a new normal.
Like most businesses across the country, dealers have been taking proactive steps to ensure consumers’ safety at the dealership, rearranging showroom layouts to support social distancing, increasing cleaning measures, and more. According to CarGurus COVID-19 Sentiment Study, among current prospective buyers, top expectations for dealer visits to purchase or service a vehicle include:
Whether it’s due to a vehicle breaking down, a new commute, a growing family, or any number of reasons, a vehicle purchase is essential for many. That’s held true even during the current health crisis: 71% of those planning to buy this year cited the purchase as necessary, according to the CarGurus COVID-19 Sentiment Study in April. However, months later and our follow-up study found that about half (47%) of car shoppers aren’t as confident in their ability to afford a vehicle as a result of the pandemic.
As a result of consumers’ dwindling confidence, demand for financing is increasing. Before the pandemic, 47% of car buyers planned to finance their purchase. Now, 56% plan to or have already done so. Additionally, around one-third of those considering financing lost confidence in their ability to get approved (31%) and the financing rate they’d expect (34%).
As consumers emerge from lockdown, change travel plans, and reconsider what mobility will look like in the long-term, vehicles are becoming even more vital to everyday life, according to our latest COVID-19 Sentiment Study in Canada. In fact, nearly a third of those surveyed said they expect to use their car more going forward than before the pandemic.
In the near-term, 45% of respondents say they see their car as an escape or for fun. Additionally, 50% say they expect to use their car for more road trips or longer drives, while 73% of those planning to travel this year say they intend to drive, rather than fly, for at least one trip.
As a follow-up to the Consumer Sentiment Study we presented in April, CarGurus surveyed an additional 505 shoppers in June to see how their feelings toward car shopping have changed during the pandemic. Overall, the study shows that despite lingering near-term delays in car purchases, most sales are not expected to be lost in the long term. Here are the key takeaways for dealers – or you can read the full report here.
To say COVID-19 has disrupted the auto industry is an understatement. The global pandemic is continuing to sweep the world, forcing car shoppers to re-evaluate their purchase plans and change their shopping behaviours. Despite the constantly evolving situation, dealers who are able to adapt still have the opportunity to bring in business and stay connected to their customers.
Here are five key takeaways from our soon-to-be-released global COVID-19 Sentiment Study that you can use to adapt your business strategy to today’s new normal.