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
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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