While the COVID-19 crisis is showing signs of easing, we understand that business won’t be back to near normal levels in the short run. To help our customers transition back into full operations, we are extending a 20% discount for all US dealer customers in June.
The discount works exactly the same as the discounts in April and May: all subscribing dealers will receive it automatically, it will apply to all subscription services provided in June, and those dealers will continue to receive their full level of CarGurus service.
Before the global outbreak of COVID-19, consumer sentiment (as measured by the University of Michigan) in the US was trending upward. Last Friday, reporting for the final full week of April showed a drop of 17.3 points to 71.8. This is the largest monthly decline ever recorded. Buying Conditions declined across large durables with car buying intentions falling to lows last recorded in 2011 and home-buying intentions at their lowest since 1983.
While our workspaces may look a little different these days, the CarGurus Product teams are continuing to build new features and product updates that matter to our dealer partners. Here are the key CarGurus product improvements you can expect now, and in the weeks to come.
To say COVID-19 has disrupted the auto industry is an understatement. The global pandemic is continuing to sweep the world, forcing car shoppers to re-evaluate their purchase plans and change their shopping behaviors. Despite the constantly evolving situation, dealers who are able to adapt still have the opportunity to bring in business and stay connected to their customers.
Here are five key takeaways from our soon-to-be-released global COVID-19 Sentiment Study that you can use to adapt your business strategy to today’s new normal.
CarGurus recently hosted a webinar with Facebook and Bosak Motors to discuss digital marketing trends for a new 2020. The participants shared many key insights over 30 minutes. Here are four important takeaways:
Update your marketing messages for the moment
Make sure to update your creative and messaging to communicate exactly what’s happening at the dealership right now. Bosak Motors updated all their messaging to advertise the services they’re offering to help keep customers safe, such as home delivery, contactless services, and online vehicle sales.
There may be some good news for auto dealers who’ve had to stop selling cars due to COVID-19. Last Friday April 17, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency updated their essential workforce guidelines to include vehicle leasing and sales:
“Workers critical to the manufacturing, distribution, sales, rental, leasing, repair, and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers.”
For the past five years, the number of new vehicles coming off lease has continued to increase. So much so that many in the automotive industry expected a decline in prices because of the rising supply. However, because the mix of vehicles coming off lease favored the more expensive SUVs and pickups, used vehicle prices have remained high. Even with a record number of off-lease vehicles coming back to the market this year and the used vehicle market flat YoY, used vehicle prices still would have only seen a slight decline. However, COVID-19 looks to have changed all of that.
A message from Sam Zales, President and COO
As CarGurus navigates the global health crisis, we continue to evaluate the impact on our employees, the economy, the auto industry, consumer spending, dealerships, and ultimately, our business. In March, we took swift, decisive action to support our dealers through this crisis. We were the first major online automotive marketplace in the U.S., UK, and Canada to announce billings relief with our 50% fee reduction for April and May. And we are committed to continuing to drive leads across our marketplaces and provide services to help dealers navigate this crisis and position themselves to rebound quickly as business resumes.
Clearly, our discounting program for dealers will result in us generating less revenue in the near term. Today, we announced a range of cost-cutting measures we are taking in response so that we can emerge as an even stronger company and continue to be the best partner to you, our dealers. Unfortunately, this included the painful decision to reduce our global workforce by 13%. For those of you that have recently had to furlough or reduce staff as a result of COVID-19, I am sure you can relate to how difficult this decision was for us. We are sad to part ways with a group of incredibly talented colleagues, and I will be forever grateful for their contributions. You can read more about this announcement in this message I sent to our employees.
The COVID-19 pandemic is rapidly reshaping our daily lives and we continue to be impressed by the creative ways our dealer partners are evolving their businesses in this new environment. Now, more than ever, our Engineering and Product teams at CarGurus are working hard to develop products to support dealers and continue connecting them with shoppers.
Starting today, CarGurus customers can highlight any contactless services that their dealership is offering directly on CarGurus. Shoppers can filter their search results based on five contactless services:
Today, our Director of Automotive Industry and Economic Analysis, George Augustaitis, and our Director of Consumer Insights, Madison Gross, team up to take a look at how consumer sentiment is trending among CarGurus shoppers.
We first mentioned the importance of consumer sentiment when we kicked off this COVID-19 series, and we’re going to dive in a little deeper with it. This is an important indicator for the industry because if a consumer isn’t confident in the economy, their job stability, or their ability to find a new job, they will be less likely to make a big-ticket purchase, such as a vehicle. When confidence is low many consumers will turn to the used vehicle market due to the lower price points, but others will wait until they feel more positive about their job security and the economy.
Because consumer confidence and consumer sentiment numbers don’t fully reflect yet the impact that the COVID-19 pandemic is having on the economy, we’re running two polls on cargurus.com. These polls allow us to track and trend how CarGurus shoppers currently feel about the economy and their sentiment about its future.