COVID-19 complications from the car-seller’s side

Industry Updates

COVID-19 and the associated lockdowns may have created changes for insurance companies as well as challenges in mechanical maintenance for car owners.

But what about for people buying cars, and those who sell them?

OMVIC, Ontario’s vehicle sales regulator, teamed up with the Automobile Protection Association (APA) to do a study on how dealerships are responding to the new world order, and how consumers are reacting to that response.

While most dealerships were totally shut down for about a month, as openings began it was evident almost everything had changed. Like most sectors, the auto industry took a profound hit as sales (and parts availability) plunged. In spite of this, sellers scrambled to adapt, and sales are recovering at an encouraging pace. Covering the period March 18 to August 30 of this year, the survey is a three-pronged approach to directly address all the main players: buyers, salespeople, and dealers.

Dealerships have stepped up to meet protocols surrounding health and safety, following guidelines that OMVIC has set forth based on both provincial and federal government recommendations. Sanitizing high-touch surfaces, adding plexiglass inserts where necessary, social distancing and masks have all led to 80 per cent of buyers surveyed saying they felt comfortable in their buying experience.

“It’s an impressive result when you stop to consider the complexity of an auto sale or lease transaction, and the need to adapt to highly varied shopper behavior ranging from consumers who conducted the whole transaction remotely (8 per cent) to those who visited three or more locations (20 per cent),” says APA president George Iny.

Franchised dealers scored higher than independents, which isn’t surprising when everyone is being tasked to find more resources in challenging times. Some 13 per cent of buyers wanted more buying options, saying they hurried their purchase because of safety concerns. Dealers pivoted quickly, and things like being able to sign a deal online (previously not allowed) were quickly put into play. Scheduled appointments for both car buying and maintenance have become the norm.

One finding was almost inevitable: fewer test drives are taking place. Roughly 46 per cent of new car buyers in this time frame made their purchase without taking a test drive, as did 38 per cent of people purchasing a used vehicle. Only 16 per cent of the latter camp had a salesperson along for the ride — previously almost unheard of. While this number has been declining for years, it’s still rather stunning. Making a purchase this big, that can’t be returned, and not taking it for at least a cursory spin?

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