Consumers consider delaying car buys, but not for long, studies find

COVID-19 might have new-vehicle shoppers postponing their  plans to buy, but not for very long, according to a pair of recent surveys.

A CarGurus survey, out today, found that shoppers might be delaying new-vehicle purchases, but a vast majority of them continue to research their purchases as the pandemic drags on.

Fewer reported delays in June versus April. 

In June, 78 per cent of 505 shoppers surveyed reported delaying their new-vehicle purchase, down from 87 per cent in April, when CarGurus surveyed 500 people at the height of the pandemic in an effort to create a baseline. But even among those delaying their purchase, the majority (70 per cent) are actively researching a new vehicle. And only two per cent of prospective buyers have now delayed their purchase indefinitely, down from six per cent in April.

“The benchmarked CarGurus Canada COVID-19 Sentiment Study showed us that while 2020 Canadian auto sales may be lagging, they are certainly not lost due to the pandemic,” Madison Gross, director of customer insights at CarGurus said, in a statement.

The agency says the results suggest that  “most sales are not lost in the long-term.”

The survey also found people growing wary of ride-sharing, ride-hailing and public transportation.

Forty-one per cent of respondents who previously used ride-sharing, and 50 per cent of those who previously used public transportation, expect to decrease their use of these services—or stop using them entirely while 59 per cent of respondents who expect to decrease or eliminate ride-sharing and/or public transportation will use their personal vehicles more as a result, potentially driving increased maintenance and service. 

“The study also shows us that COVID-19 has caused vehicle ownership to become more vital to consumers’ everyday lives, often replacing other transportation methods such as ride-sharing or public transit,” Gross said.

The survey did find one growing hurdle in new-vehicle purchases: Customers are losing the confidence in being able to afford one.

Forty-seven per cent of car shoppers are less confident in their ability to afford a vehicle purchase as a result of COVID-19. Before the pandemic, 47 per cent of potential buyers planned to finance their purchase. Now, 56 per cent plan to (or have done so since April). And around one-third (31 per cent) of those considering financing lost confidence in their ability to get approved.

“Despite these near-term challenges, people are saving and laying a foundation for a better financial future,” the report reads.

CarGurus found that 44 per cent are spending less specifically on experiences, which could ease budgeting for durable goods and that 43 per cent agree the pandemic will cause them to be more careful about money management going forward.

Meanwhile, a study by Kijiji Autos found that the majority of new-vehicle shoppers are open to buying now or within the next two to three months.

The online classified site found that 77 per cent of respondents still intend to buy a new vehicle over the next three months. Nearly half of those surveyed (48 per cent) said they have not delayed their purchase due to the pandemic. Overall, 88 per cent of the 500 new-vehicle shoppers surveyed said they are still looking to purchase a vehicle during COVID-19. Only 12 per cent said they are postponing their vehicle purchase during the pandemic.

The study also found consumers still have a need for dealerships and test drives.

Fifty-three per cent of respondents want to ask specific questions about the vehicle in person and 60 per cent want to take “a safe solo test drive.”

“Car shoppers want the freedom to test drive their vehicle independently,” the report reads.