How the pandemic shaped the car buying experience
The COVID-19 pandemic has transformed almost every aspect of life. From the way you shop at Zoom meetings, the world has adjusted to its “new normal” over the past couple of years – and the auto industry is no different.
Fewer drivers visit dealerships, and more search and even buy directly online. If you are planning on purchasing a vehicle in the next year or so, it is wise to understand this new landscape to be better prepared.
Will traditional car dealerships become obsolete?
Simply put, no. The car salesmen and inflatable tubes dancing in front of the dealerships won’t be collecting dust anytime soon. But the days of crowded dealerships are over.
Auto dealers are in a period of major transition as they try to catch up with the decline felt in the wake of the pandemic. Dealers are recovering from both the reduced number of drivers on the road from initial stay-at-home orders and current declines due to inflation and the global shortage of chips.
Buying a vehicle has always been an expensive process, but over the course of 2021 it has become even more expensive. October was the sixth month in a row that drivers saw record prices on new cars. Wholesale prices for used vehicles rose 4.9% at the start of November, according to Cox Automotive.
Rising prices and the shortage of chips have also had a huge impact on how dealerships sell cars in another way. Used cars are currently in high demand. Fewer cars produced and higher prices mean more drivers are looking for used cars, and dealerships must change to meet that need.
Online shopping is in
It’s like you can get anything right at your doorstep with just a few clicks. Apps like Uber Eats and Instacart have changed the way consumers shop every day. Unsurprisingly, the automotive market is finally catching up with this trend.
The experience of buying a typical car hasn’t undergone a major transformation in many years, and consumers have become accustomed to the tedious process of getting a new or used vehicle from a dealership. But as safety regulations still remain inconsistent due to COVID-19, many dealers have had to follow suit with changing technology and embrace the expanding online marketplace.
This shift to online car buying is not a completely new idea. Many local dealers have made online marketplaces available for customers to view inventory before arriving in the field. But the experience of buying cars online has become much more in-depth in recent times.
In early October 2021, Hyundai announced a partnership with Amazon that gives drivers access to a virtual showroom called the Hyundai Evolve. Your vehicle still won’t arrive in an Amazon box – once you find the perfect model and finish, the site will connect you with a local Hyundai dealership.
If a door-to-door experience is more your style, Carvana is another retailer that explores a car buying experience almost entirely online. These are the first two of many online options that will gain traction in the years to come.
Bargaining is (mostly) over
A low stock means that the history of negotiating the perfect price is not an integral part of the buying experience. With fewer cars available for purchase, fewer drivers are negotiating their perfect price because they are just happy to be leaving in a new vehicle.
But that doesn’t mean you should dismiss the idea all together. You can often negotiate dealership extras – such as paint protection, anti-rust and VIN etching – to lower your exterior price.
The shortage of fleas
If you’ve been looking for a car for the past few months, you’re probably familiar with the semiconductor shortage. The cause of this shortage dates back to early 2020, when production and consumer demand for vehicles came to a halt due to COVID-19. These chips aren’t just used for vehicles, so as more people worked from home, the focus shifted from vehicles to more personal and professional technologies.
Unfortunately, waves of the chip shortage will continue to impact dealers and consumers in 2022. Available supply is struggling to meet driver demand. Simply, a lack of vehicle inventory has led to an increase in vehicle prices.
It will take some time for dealerships to catch up with demand, which, as mentioned earlier, has led to an increase in the number of drivers flocking to used car options and simply waiting for conditions to improve. But even if some dealers see their profits increase, many lots remain empty. There are fewer vehicles available for sellers to sell, so the market is competitive.
But there are still ways to come away satisfied, even as the chip shortage continues to impact the vehicles available: take advantage of online car shopping.
4 Ways To Use Online Car Shopping To Your Advantage
Online car buying is still relatively new and requires a bit of learning. While some tips are consistent with traditional car buying, heed these tips when you jump off the showroom floor and go online to buy a car.
In person or not, do your research to find the right vehicle is the first step in the car buying process. Consider the factors that matter most to you: vehicle size, fuel mileage, or even style and color. While you may not be able to explore your new vehicle in person, YouTube car tours are a great resource for seeing the specifics of a vehicle.
2. Set a budget
After you have defined the type of vehicle you want, it is important to determine how much you are willing to spend and set a budget. Finding this number takes a little extra work but is much easier to do without a salesperson pressuring you. Enjoy being at home and consider all contributing factors, such as your salary, fuel, insurance, and additional vehicle costs.
3. Check the local inventory
Another benefit of buying your vehicle online is the ability to check local inventory before you go looking in person. This can be done in several ways. Look for specific dealers in your area – find Toyotas sold near me or use websites like Edmunds or TrueCar. It will also help to your negotiations because you will have a better understanding of the price landscape for the car of your dreams.
4. Chat online with sellers
Bargaining can be one of the most intimidating parts of the car buying experience, but when you’re sitting behind a computer screen, it’s a lot easier to haggle for the price you deserve. Most of the online marketplaces you come across will have a chat option, use that as a space to ask the right questions. Focus on firmness and share the information you find while checking local inventory on competing pricing options.
The bottom line
It is clear that the car buying experience has changed for both the dealership and the buyer over the past couple of years due to a combination of factors – global pandemic, chip shortage, fuel chain issues. supply, growing technology. But with or without the looming pandemic as we venture into 2022, it’s important to remember that an industry refresh is underway and bringing increased accessibility and transparency to the driver.
So, while the habit of driving to a parking lot is unlikely to go away altogether, it is still best to be prepared to shop online where you can hope to save both money and money. time.