Despite pandemic-driven uncertainty, Americans are buying new cars
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I spoke with many people Wednesday who told me they had bought a new car since March.
“Cars are a little cheap right now, at least from our shopping around,” said Corey Wood of Chicago.
“It came to the point where it was either buy new tires or buy a new car,” said Gia Cattaneo of Haddon Heights, New Jersey.
“Zero percent financing for seven years — that was really hard to ignore,” said Drew Thorne of Lucas Valley, California.
Each reported researching used cars first. (Everyone tells you how much a car depreciates when you drive it off the lot.) But these days, used cars aren’t the value they once were.
“The gap between the new and the used isn’t as big,” said Bernard Swiecki at the Center for Automotive Research. “Also, many people, when they buy a new car, they trade in their old car, and now the value of your trade-in is going to be higher because that’s the values that we’re getting.”
He said low to 0% financing also helps people pull the trigger on a new car.
And there’s another thing that helped drive car sales over the past few months.
“It all started with the [federal] stimulus,” said Garrett Nelson at the investment research firm CFRA. “It was a windfall of cash for a lot of consumers. And many of the consumers went out and bought cars.”
He also said many first-time car buyers had traditionally taken public transit, especially in urban centers, but safety concerns during the pandemic changed the equation for them.
“People just wanting the freedom of being able to control their mode of transportation,” Nelson said.
And who have enough cash to make that happen.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
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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