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.
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