The coronavirus has complicated car buying, raising questions about logistics, pricing, and even basic safety. We’re here to sort out how car buyers, dealers, and the industry at large, are meeting the challenge.
As of today, only five US states (AK, IA, ND, NE, and SD) do not have blanket or county specific stay-at-home orders. But many Americans still need to buy cars, regardless of the pandemic. A sharp drop in ridesharing and the use of public transportation have left people in need of alternative transportation. Additionally, according to J.D. Power, 1.8 million vehicle leases will be expiring over the next few months, leaving many Americans in need of a new vehicle. Buying a car while social distancing can pose significant challenges.
Dealers have been lobbying state governments to consider car dealers essential businesses in order to keep their showrooms open alongside their service bays. States have differed on how to interpret current federal guidelines, with some states, like Tennesse and Ohio, allowing sales, while others, like Delaware and Kentucky, are not. The NADA, along with other trade organizations, sent a letter to the White House requesting federal clarification in late March.
In this environment, dealers are having to get creative in how they interact with customers and still meet their needs. J.D. Power predicts manufacturers and dealers will be offering major incentives to keep the wheels of business churning, even as factories are idled or shift to the production of medical supplies. Some of those incentive programs are already being rolled out.
Manufacturers have been quick to respond to the changing sales market. Companies currently offering new 0% financing include: FCA, GM, Nissan, Subaru, Volkswagen, and Kia. Deferred payment programs are even more popular, with periods of 90 and up to 120 days. Companies now offering deferred payment plans include: Ford, FCA, GM, Mazda, Nissan, Toyota, Porsche, Mitsubishi, Honda/Acura, and Kia.
Some of these deferment programs are limited to specific vehicles or to new vehicle sales, while others apply more broadly and include recently purchased cars. For example, Hyundai/Genesis is offering Job Loss Relief on vehicles purchased between March 14th and April 30th. Manufacturers are asking current customers to reach out to their financing arms with requests for payment deferrals and addressing customers’ needs on a case-by-case basis.
Most manufacturers are also offering at–home delivery services, allowing the car–buying process to exist almost entirely online. Some manufacturers, like Audi, GM, and Tesla, already have at-home delivery services they’re now leveraging. Other companies, like Fiat Chrysler and Mercedes-Benz, are having to initiate new processes, with dealers taking the lead on implementation.
Social distancing rules out the traditional showroom experience, but the good news is the car buying process can be completed almost, or in some cases entirely, online.
It’s important to know what you need in a car. Researching and identifying what kind of vehicle you want and making a list of must-have features and relevant specs makes the buying process easier when it comes time to talk with a salesperson. All of this can be done online by reading reviews, comparing listings, and visiting dealer and manufacturer websites.
Once you know what kind of vehicle you want, it’s a matter of finding the right one at the right price. Dealer websites and third-party listing sites like Carsforsale.com are invaluable resources in normal times and indispensable under current circumstances. There you can compare prices and, with the help of vehicle history reports and photo galleries, assess the condition of vehicles.
Once you’ve identified a short-list of possible candidates for your new vehicle, it’s time to contact dealerships for virtual walkaround. Using the video conferencing software of your choice (Skype or Facetime for example), a dealer can show you around the vehicle, highlighting features and (if it’s a used vehicle) even giving you a detailed look at the engine compartment and undercarriage. Most dealers will be happy to accommodate you, and you’ll probably end up with a more thorough look at the vehicle than you might have gotten in person.
As with the rest of the process, applying for financing, through the dealer or your local lender, can be completed digitally. Many dealers and banks have online forms you can fill out to apply for a loan. Let dealers know if you’ve been preapproved for a loan, as they may be able to offer a better rate.
To ensure the safety of their customers and employees, many manufacturers and dealers are offering at-home delivery services that follow social distancing best practices and align with CDC recommendations. These include limiting or eliminating face-to-face interactions between customers and sales staff and thoroughly cleaning and disinfecting vehicles prior to, and as part of, the drop off process.
Dealers using Carsforsale.com, among other platforms, allow you to complete final transaction paperwork digitally, without having to meet in person. Make sure to inquire about digital paperwork and no-contact delivery options with your dealer early in the process.
Challenges spur innovation. Manufacturers and dealers continue to find new ways to service their customers and spur growth in the industry. Internal discussions at Ford indicate the company will be asking the federal government to provide additional stimulus to the sector, possibly in the form a trade-in program akin to Cash-for-Clunkers. It’s also likely that current manufacturer incentive programs could be extended or expanded to help encourage additional new vehicle sales.
The automotive industry is full of resourceful people, dealers, and manufacturers willing to go the extra mile to ensure customers can still get what they need when they need it. Car buying may be more complicated in an era of social distancing, but, it’s not only possible, virtual car shopping is becoming mainstream.
Great article. I was under the impression that automotive dealers would be out of commission for the meantime. I thought that aftermarket sites are the only ones available for those who are in need of parts for the cars during the pandemic. It’s good to know that the market is this kind of flexible and willing to go the extra mile just to make sales.