How many people will be in the market to buy a car once the UK’s current COVID-19 lockdown restrictions have been eased? The answer, as with so much connected with the impact of coronavirus, is that nobody knows. However, there are reasons to be optimistic, not least in the news that 84% of buyers who had planned to buy a car in 2020 are still actively researching their purchase.
That’s according to a study by CarGurus, which also highlights that only 4% of those who said they were planning to buy a car this year will delay their purchase indefinitely.
As to the possible speed of the bounce back, 24% of those who answered the CarGurus COVID-19 UK Consumer Sentiment Survey said they’d purchase a car as soon as lockdown restrictions are lifted. Of those who thought they’d take longer, 12% said they plan to purchase within 1-3 months, 21% within 4-6 months, and 22% within 7-12 months.
APRIL DECLINE IN NEW CAR SALES
The survey results come against the backdrop of a car market that has all but closed down due to the lockdown caused by the coronavirus pandemic. As part of the UK’s lockdown measures, car dealerships have been ordered to close in order to help prevent the spread of COVID-19. As a result of this (along with other concerns including the lockdown, job security, and the health of the economy in general), new car sales fell by a record 97.3% in April 2020. That means only 4,321 New cars were registered, the most popular of which was the all-electric Tesla Model 3.
As well as examining pent-up demand in the car market during lockdown, the CarGurus survey asked respondents about specific concerns linked to the impact of the pandemic on their potential purchase, and what barriers they believe exist. These included economic uncertainty, dealership closures, and a belief that their purchase might put people at risk.
WHAT’S DRIVING DEMAND FOR CARS?
For 64% of respondents in the survey, the purchase of a vehicle this year is deemed as necessary. Among the factors that that appear to be driving demand are concerns around how to implement social distancing measures on public transport and ride sharing services. Nearly half (48%) of people in the survey who have previously used ride sharing or taxi services expect to decrease their use of them once the lockdown restrictions are lifted. A similar number (44%) said the same applied to public transport.
In some cases demand for cars could also shift from the new car market to used models once lockdown measures are eased. In total 37% of respondents to the CarGurus COVID-19 UK Consumer Sentiment Survey who said they’d originally planned to buy a new car this year now expect to look at a used or approved used model instead.
“There is no doubt the COVID-19 pandemic is having an impact on the automotive industry, but our study shows it’s not all bad news for the sector,” said Madison Gross, Director of Customer Insights at CarGurus. “Many consumers are still planning to buy a vehicle quickly when the lockdown ends. And in a strange twist, concerns about public transport and ride-sharing may actually drive new demand.”
The study comprised of 501 shoppers and can be downloaded via the CarGurus UK COVID-19 Sentiment Study webpage.
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