The COVID-19 pandemic did not just impact the healthcare system of America. It affected many more industries and brought the economy to a screeching halt. Many businesses had to close down their stores, and the remaining ones tried to figure out how they could continue their operations.
The majority of the workforce has been forced to work from their homes or other remote locations. The automobile industry was also affected like the rest of the businesses in several ways, and most used car sellers are wondering whether the effects would be long-term. We are going to discuss how the COVID-19 lockdown has created long-term changes in the used-car market.
Impact on Consumer Behavior
The lockdown severely impacted the way people buy all sorts of things. While most brick and mortar stores had to shut down for an indefinite time, online businesses were able to embrace the change and thrive on it. However, most people are wondering if eCommerce behavior is going to stay the same once the pandemic gets over.
Online shopping was not born during the pandemic. Consumers were slowly adapting to buying things online before the lockdown started. However, there is no denying that it got a catalytic boost due to the lockdown. Many market leaders believe that eCommerce jumped forward by almost a decade due to the COVID-19 pandemic.
There is no doubt that many consumers would feel relieved once the pandemic is over and would like to experience buying things in person in physical stores. However, most buyers would also wish to continue buying things online because they have realized and started enjoying the convenience.
Impact on the Used Car Market
As we mentioned before, the used car market has also been affected severely due to the pandemic. The impact of lockdown varies dealership to dealership depending on local lockdown regulations and consumer behavior.
While some regions considered car sales to be an essential commodity, others deemed it as non-essential. However, this changed later, and the sale of used cars was allowed to operate as long as they maintained the health and safety protocols.
Most market leaders had predicted the sale of used cars to plummet severely. However, the story did not unfold the way most people expected. While there was an initial decline in the demand for used cars during the initial days of lockdown, it was short-lived, and the sales picked up soon again.
Experts had also assumed that there might be a shortage in the supply of used cars during the pandemic. Since a lot of people suffered financial crises during the lockdown, many of them had to sell their vehicles during the lockdown. Car rental companies also suffered the loss of business, so they did not renew their car fleets.
Some well-known car rental brands like Hertz suffered from severe losses and liquidated a large part of their fleet. But at the same time, a lot of people needed their own vehicles as they wanted to avoid public transport during the pandemic. It ended up maintaining the balance of demand and supply for used vehicles in the US market.
A prime reason why the used car sales industry did not sink completely was that some startups like Gettacar had started car buying platforms online. These startups made purchasing a car online as simple as ordering Ben & Jerry’s ice cream from goPuff.
Changes in Used Car Market
While many consumers recognized that there could be some downsides to buying a car online, they understood that the perks outweigh the limitations. Sometimes the car that got delivered was different from what it looked like online. Some customers faced issues with returning the car or getting hold of customer service.
But as with any other online purchase, consumers have to look for reliable and reputable car dealerships on the Internet. Such online car dealerships have undertaken some innovative developments during the pandemic, that set them apart from the ordinary ones.
Test Drive on Deliveries
One of the biggest challenges people faced while buying cars online was to test drive the car before purchasing it. However, reputable car dealerships came up with a way to fix this problem.
Once the car gets delivered to the customer, he or she has seven days to drive it and understand whether the car is in good condition or not. It is most likely that this term has become permanent for online car dealerships and will continue in 2023 as well.
Haggling over the price was another challenge for customers when they bought used cars in traditional ways. However, online car dealerships have an upfront pricing system that makes it convenient for the buyer and the seller.
Since these dealerships do not have a sales department, they do not have to pay a commission to the salesperson, which means that the car pricing is fair. Since both customers and dealerships can save money this way, it is likely to continue in the coming years.
Traditionally, buying cars was a very time-consuming affair for most customers. Not only did they have to visit several car dealerships, but they also had to work out the finer details of the deal, including financing of the car.
Online car dealerships have a pre-designated network of financers, insurers, and other services that a consumer can utilize with a few clicks of the mouse button. Since the customers have started to enjoy these benefits under one roof conveniently, it can be safely assumed that they will continue to do so even after the pandemic.
The COVID-19 pandemic has created several changes in the market and consumer behavior. The used car business has also been affected by these changes, positive and negative. While used car dealerships benefited from business continuity by taking it online, consumers have become accustomed to the convenience.
It is most likely that these behaviors have become part of long-term changes due to the pandemic, and would continue to affect the process of buying and selling used cars in the future.