Car shoppers are waiting, but still want to buy in 2020
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Next week, we’ll start to get some numbers on how the auto industry has been impacted by the COVID-19 movement restrictions when Ford and Tesla report earnings.
This year was originally set to be a great one for vehicle sales, with forecasts in January saying up to 17 million cars and trucks would be sold. Now analysts have revised that to more like 13 million for the year.
But that is just an estimate. Like the rest of the economy, automakers and dealers are waiting to see when things get back to some semblance of normal, and whether people rush out to buy cars.
When it comes to car shopping, researchers are working hard to get some early insight into consumer behavior.
“Our study says that sales are certainly delayed but not lost entirely,” said Madison Gross, director of customer insights at CarGurus. Its survey of prospective car shoppers shows 79% of buyers are waiting but still willing to buy.
And there could be a bump in car sales as a third of people surveyed say they will decrease public transit use.
“It’s a really interesting dynamic that could potentially drive new demand that wouldn’t have been there otherwise,” Gross said.
April will be the first full month in which the vast majority of the U.S. population has been under movement restrictions. Eric Lyman, chief industry analyst at TrueCar, said its preview of sales for the month shows a 50% drop — which is less than expected.
“It did surprise us, so we looked at some sales performance globally, especially in China, where the decline in sales in the lockdown was about 80%,” Lyman said.
Part of the reason might be attractive deals from some automakers, like seven-year, interest-free loans and deferred payments, Lyman said.
Some people looking for a cheaper car will turn to used vehicles. New research suggests they may find a bargain, according to Ivan Drury, senior manager of insights at Edmunds.
“There will be this flood of off-lease inventory, [and] they will be relatively new cars,” Drury said.
That’s good news for shoppers but less welcome for anyone hoping to get a good trade-in price on their old car.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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