We asked 724 people how their world and car buying habits have changed. Here’s the topline on what they said:
Their lives are in transition right now, especially with regards to their jobs. What they want in a vehicle hasn’t shifted significantly, but the timing and how they might buy it has. Many expect to delay buying a vehicle and the opportunity for online vendors is growing.
The good news – 3 out of 4 of those surveyed expect a return to normal within this calendar year and they are counting on traditional dealerships to provide their vehicle needs now and into the foreseeable future.
- Jobs are in flux now. Thirty-five percent of respondents expect to get a new job this year. Twice the benchmark from a Mintel study last summer.1
- Timeline to purchase is extending due to the coronavirus outbreak.
- Intent to purchase under a year is down by seven percentage points
- Between one and two year purchase intent doubled to thirty-one percent
- Three year and beyond purchase intent rose by seven percentage points
- Expectation to purchase from an online vendor like Carvana or Vroom is at sixteen percent, double the expectation three months ago.
- Expectations that dealerships will survive into the future is thirty-three percent higher than in the 2019 study.1
- Interest in filling out financial statements online is higher now due to the coronavirus outbreak including getting a trade-in estimate online. (Try ours)
What hasn’t changed:
- Most people still expect to buy from a traditional dealer with sixty-nine percent of consumers indicating if they bought a car today, they would buy that car from a local traditional dealership.
- The type of vehicle they expected to purchase from body style, to new or used and even range of price has not significantly changed.
The dominance of local traditional dealerships is not surprising. In an environment with exceptional change, the familiar is often valued more. Given the unique challenges of social distancing, it is especially heartening to see these high numbers. The rapid response of dealerships to keep customers safe may be a positive driver. One respondent captures this perfectly in the verbatim below expressing interest in purchasing from a traditional dealer over all other options.
Only from a reputable licensed dealer with strong reputation for honesty and reliable sales and service proven reputation!
See all of the data and details below. While the current environment is full of challenges, the opportunity for local traditional dealerships remains large.
Respondents shared that their lives are full of change right now. Thirty-five percent of people surveyed are expecting to find a new job this year. That response is particularly notable as that’s almost double the eighteen percent response that the same question yielded last summer.1
What major life changes do you expect to occur in the next year?
In terms of purchase intent, there were shifts back from under a year to between one and two years or over three years to purchase.
When do you next plan on buying a vehicle?
The type of vehicle they intended to purchase did not shift significantly over the last three months. While the data collected below shows a very slight shift to trucks and sedans away from SUVs and vans, that variation is not statistically significant.
If I were to purchase a vehicle it would be a â€¦
Consumers did not indicate a significant shift in purchase type across new, used or CPO vehicles. Again, the slight variation noted is not statistically significant.
If I were to purchase a vehicle it would be:
There is also no statistically significant swing in the expected price range for vehicle purchase.
If I were to purchase a vehicle it would be in the price range:
In terms of purchase channel, the consumer was more open to trying an online vendor like Carvana or Vroom with nine percent of the users who would have purchased at a traditional dealership three months ago, now indicating they would try an online option. Dealerships communicating their online options will be critical.
If I were to purchase a vehicle it would be from:
When asked about changes specifically due to the coronavirus outbreak, there were three actions that stood out as significant changes due to the outbreak. Forty-six percent of consumers indicated they would be delaying a purchase, consistent with the shift to longer time frames for purchase intent. Thirty-one percent of consumers indicated they are more likely to fill out a finance application online and thirty-percent of consumers were more likely to request a trade-in estimate online. If that jump in online financial preparation materializes, that would meaningfully change the number of transactions fast-tracked through the physical dealership and available for off site delivery.
How have your plans on buying a vehicle been affected by the current coronavirus outbreak?
When asked when things would be “back to normal” post coronavirus, the most popular response was this summer, with sixty-seven percent indicating a return to normal before the end of fall.
I think post coronavirus, things will be “back to normal” in the …
Finally, as they think about what the future might hold for car buying, they don’t expect that the dealerships will go away. This number is significantly more positive than last summer.
It is not uncommon to see when times are more turbulent that trusted brands and traditional options are valued more. The belief that the local traditional dealership will continue to serve and that the top online option would be directly from an OEM are consistent with this. The impact of Tesla and efforts by large OEMs on direct to consumer electric car purchases overall may also be influencing forty-two percent of respondents indicating direct buying from automakers is likely in the future. While there are no shortage of challenges for automotive retail, the opportunity for traditional dealerships is large now and will only grow as the outbreak passes.
We’re here to help: MAX clients can add MAX BDC, the sales tool that helps build engagement while social distancing. Learn more.1 All prior year comparisons are to the July 2019 Car Purchasing Process study by Mintel. Their fieldwork was completed in May of 2019. Questions fielded were identical, though sample size, timing and respondents varied. Comparisons should be considered directional.