Topic: consumer sentiment
Throughout the pandemic, CarGurus has kept a pulse on consumer sentiment around car shopping through its Covid Sentiment Study. The Q3 edition, which surveyed 600 US consumers in July, found good news for dealers: consumer confidence is up 17 percentage points among respondents. Seven in ten (69%) say the pandemic did not negatively impact their ability to afford a vehicle today, vs. just five in ten (52%) in June 2020.
However, the pandemic continues to have a lasting impact on the industry, shaping attitudes around car shopping. Below, we explore which trends are temporary and which are here to stay.
Nine months in and the Covid pandemic continues to sweep across the globe, impacting nearly every industry, including automotive. To keep a pulse on the virus’s impact on car shopping sentiments, CarGurus has surveyed over 2,000 car shoppers over three separate studies and benchmarked the results. Here, we break down our latest COVID-19 Sentiment Study conducted in November and share key takeaways on digital retail, supply, and financing.
Before the COVID-19 pandemic hit, car dealers were already facing questions about what the future of the industry would look like. With consumers’ preferences changing and advancements in digital retailing strategies continuing to be made, many have been at least starting to think about tactics like online financing and home delivery. But the current health crisis has accelerated many of these trends, and today’s dealers must adapt to a new normal.
Like most businesses across the country, dealers have been taking more proactive steps to ensure consumers’ safety at the dealership, rearranging showroom layouts to support social distancing, increasing cleaning measures, and more. According to CarGurus COVID-19 Sentiment Study, among current prospective buyers, top expectations for dealer visits to purchase or service a vehicle include:
Whether it’s due to a vehicle breaking down, a new commute, a growing family, or any number of reasons, a vehicle purchase is essential for many. That’s held true even during the current health crisis: 68% of those planning to buy this year cited the purchase as necessary, according to the CarGurus COVID-19 Sentiment Study in April. However, months later and our follow-up study found that about half (48%) of car shoppers aren’t as confident in their ability to afford a vehicle as a result of the pandemic.
As a result of consumers’ dwindling confidence, demand for financing is increasing. Before the pandemic, 49% of car buyers planned to finance their purchase. Now, 60% plan to or have already done so. Additionally, around one-third of those considering financing lost confidence in their ability to get approved (33%) and the financing rate they’d expect (34%).
As consumers emerge from lockdown, change travel plans, and reconsider what mobility will look like in the long-term, vehicles are becoming even more vital to everyday life, according to our latest COVID-19 Sentiment Study in the US. In fact, one-third of those surveyed said they expect to use their car more going forward than before the pandemic.
In the near-term, 49% of respondents say they see their car as an escape or for fun. Additionally, 45% say they expect to use their car for more road trips or longer drives, while 72% of those planning to travel this year say they intend to drive, rather than fly, for at least one trip.
As a follow-up to the Consumer Sentiment Study we presented in April, CarGurus surveyed an additional 779 shoppers in June to see how their feelings toward car shopping have changed during the pandemic. Overall, the study shows that despite lingering near-term delays in car purchases, most sales are not expected to be lost in the long term. Here are the key takeaways for dealers – or you can read the full report here.
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.
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.
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.