I don’t need to tell you that we’re in a challenging time. The coronavirus pandemic has virtually shut down the economy. It’s wreaking havoc on the stock market, and is causing record levels of unemployment. Hopefully, this is a once-in-a-lifetime event.
With the economic downturn, a few people have asked me the same question: is this a good time to get a great deal on a car? Here’s my perspective.
How has the coronavirus pandemic impacted the car shopping process?
The extent to which automotive dealerships are currently operating largely depends on your state. Some states have declared that car sales is an essential business activity, so local showrooms may be open. Some dealerships have restricted their operations, possibly opening by scheduled appointment only. And depending on where you live, showrooms might be closed completely. Before you slip on your face mask and head out, do some googling and make a phone call to your dealership first.
The Coronavirus has changed procedures
Many dealerships that are up and running are exploring some changes to their normal operating procedures. Many are offering to drop off a vehicle to your home for a test drive. Several dealers allow you to complete all paperwork digitally from home, and can deliver your purchased vehicle to you. These are precautions for the safety of the dealership staff, as well as yourself. But as an added benefit, the car shopping process may be easier and more convenient as well.
However, if you’re just beginning to shop and are in the tire-kicking phase (that is, poking around and sliding behind the wheel to determine which vehicles you like and which you don’t), scheduling an at-home test drive for one car at a time would be more time consuming than spending a few hours bouncing around car lots. Trying to narrow down your list may take more time in the age of the coronavirus.
It will be interesting to see if these new operational measures remain in place once all pandemic-related restrictions are lifted. The traditional car sales model has been largely unchanged for decades. Used car retailer Carvana was really the first company to put online car selection, paperwork completion and home delivery into the mainstream. Only within the past year or so has it appeared that other dealerships were starting to follow suit. If there is a silver lining to these otherwise awful times, as far as automotive sales are concerned, the pandemic and resulting stay-at-home orders may inspire more dealers and manufacturers to innovate in how they do business.
To the extent that it is possible to shop for a car right now… should you?
In most cases, it is probably a good time to get a great price on a new or used car. Many new car manufacturers are allowing buyers to defer the first payment for a few months. Zero percent interest rate offers on new car loans are becoming more common as well. But with auto sales down, you will likely also be in a strong position to negotiate a good deal. But, is it really the right time?
Before you decide the answer to that question, I highly recommend that you have a brutally honest conversation with yourself. Consider the following.
Is now truly the right time to take on a new, major financial burden?
This is a question that you should consider during any economic downturn and is not specific to the coronavirus pandemic. It is probably the most crucial question to ask yourself. Job losses are at levels that we have never seen before. If your employment is secure today, will it be in a few months from now? What if shelter-in-place orders are still in effect? This situation is evolving daily, so it’s impossible to predict where we’ll be next week, next month, or next year.
It is not my intention to spread doom and gloom. But in times like these, it’s crucial to err on the side of caution. If the worst were to occur and your family’s income was greatly or completely reduced, would this new vehicle purchase be an undue hardship on your finances? If so, no matter how great of a deal you’d be able to negotiate, it would be prudent to wait.
Are you currently working from home, and might you continue to do so for the foreseeable future?
I question how temporary the remote work measures put in place by many companies will be. Certainly many industries will need employees to return to working in a specific location or office as soon as possible. But perhaps other companies who believed that working remotely was incompatible with their operations may be learning that isn’t entirely the case. So even after stay-at-home orders are lifted, I think we’re likely to see a larger percentage of the workforce working remotely.
If your commute was eliminated or greatly reduced, is your need for a new vehicle as urgent as it was a few months ago? Maybe you can afford to squeeze a little more life out of your old vehicle while you weather this economic instability, if that car won’t be relied upon for commuting as frequently as in the past.
Will you still need the same type of vehicle that you were considering before the lockdown?
If you’ve determined that now is the time to move forward with a new vehicle, I encourage you to carefully reevaluate your priorities first. For example, say that you decided pre-pandemic that you wanted to purchase or lease a new Lexus SUV. But while the economy recovers, you may find that a slightly less luxurious and more affordable Toyota SUV could equally meet your needs. Or, returning to the issue of commuting versus working remotely, perhaps you previously thought you would need a vehicle with all-wheel drive for commuting in bad weather conditions. But if you’ll either continue working from home, or may at least work remotely when bad weather hits, a more affordable and more efficient front-wheel drive vehicle may work for you after all.
If you’re desperate for a new vehicle, navigating the automotive marketplace during the coronavirus pandemic might enable you to negotiate an attractive deal. But now more than ever, the purchase of a new vehicle should not be taken lightly. Carefully consider whether you truly need a new vehicle now, or whether it may be wise to hold off until we’re living in more secure times.
If now is the time for a new vehicle, I can help. Instead of spending time scheduling in-home test drives, or spending days doing your own research to determine how to narrow down your options, consider the Starter Package. For $199, I’ll send you a brief survey. I will create your Short List – three vehicles that will meet your needs, wants, and budget. All recommendations will have excellent reliability and safety records. For more on the Starter Package, check out this blog post.
Even if you already have an idea of what vehicles you’re interested in, I have a lifetime of automotive knowledge and passion for following the automotive industry, technology, and newest models. I may have some top-rated suggestions that you would not have considered otherwise. Please reach out. I’d love to help!
Stay healthy, and keep washing your hands. As always, thank you for reading.