Nine months in and the Covid pandemic continues to sweep across the globe, impacting nearly every industry, including automotive. To keep a pulse on the virus’s impact on car shopping sentiments, CarGurus has surveyed over 2,000 car buyers over three separate studies and benchmarked the results. Here, we break down our latest COVID-19 Sentiment Study conducted in November, and share key takeaways on digital retail, supply, and financing.
Consumer interest in digital retail remains steady.
At the start of the pandemic, consumers expected they’d return to their normal shopping habits fairly quickly—which most have come to accept is no longer the case. Instead, consumers have grown more and more comfortable and familiar with online tools as Covid has continued to disrupt all aspects of life. For dealers, this includes buyers’ increase in openness and preference for digital retail. Before the pandemic, 41% of respondents said they were open to buying online. Now, 66% are open to the idea—and this openness hasn’t wavered since June (61%) or April (65%).
As buyers continue to enter the market, it’s crucial that dealers offer innovative online shopping solutions to address evolving consumer needs. Even if it’s providing just a portion of the process online. For example, buyers are more likely to prefer online price negotiation (56%) than online purchase (31%).
Supply issues are impacting buyers too.
Between the closure of in-person auctions, the drop-off of trade-ins as sales slowed, and a wave of consumers choosing to extend their leases so they wouldn’t have to deal with getting a new vehicle during the pandemic, wholesale vehicle levels in the UK have been dramatically reduced. Buyers’ perceptions of selection and price have varied since the pandemic started though.
Of those who bought during the pandemic, 6% said the selection was much worse than expected and 29% said it seemed somewhat worse. However, those who bought during the pandemic felt pricing was more favorable at the time. Pandemic buyers were more likely to say prices were lower than expected, compared to those currently shopping (30% vs. 22%).
Affordability concerns have buyers staying open-minded about key decisions.
Affordability concerns have impacted those who’ve already bought during the pandemic and those still shopping today: 39% of total respondents said they’re less confident in their ability to afford a vehicle due to the pandemic. This is only compounded by the fact that many buyers assume the great deals during the early days of the pandemic are over. In fact, 24% of current buyers expect prices to be higher due to the pandemic. As a result, many are staying open-minded about what vehicles to consider: 55% are considering more than one brand and 33% are considering more than one type of vehicle.
These widespread affordability concerns have led to an increase in demand for financing. Before the pandemic, 38% of buyers were planning to finance their vehicle purchase—now, 52% plan to (or did). In addition to an overall surge in demand for financing, 35% of buyers would now prefer online financing options.
Despite the challenges, dealers continue to adapt.
As the UK emerges from its second lockdown, dealers should continue to adapt to buyers’ new preferences, increased openness around make and model, and additional financial stress. Consumers still need to buy cars, pandemic or not, and dealers will need to find a way to adjust to the new reality and keep selling cars.
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