The automotive industry is among a few sectors that are globally connected to support their operation. The COVID-19 pandemic has, however, disrupted this interconnectedness, resulting in the closure or temporary suspension of most production plants worldwide.
The domino effect brought changes in both the supply and demand ends of the industry, and this led to mixed opinions on whether the time is ideal for car shopping. Some market segments consider this the perfect time for car shopping, although this is not the general view. In this article, we cover everything you need to know if you’re on the fence about getting a new car during this period.
Is it the perfect time to buy a car?
When you look at most car ads today, you'll notice relatively lower prices and reasonably favourable buying options. Rest assured that automakers didn't just have a dramatic change of heart. The new adjustments are on account of the cumulative effect caused by the coronavirus crisis. It includes the shift in demand and supply of car parts, closure of manufacturing plants, and disruption of the supply chain.
Last month, car sales hit a record low (around 35%) for the first time in a decade, and things are unlikely to improve this month or anytime soon. The chances of sales going up are even bleak, considering governments in most countries have resorted to lock-downs, curfews, or cessation of movement.
Sweet deals to entice customers
Major suppliers of auto parts have plants in China, Europe and a few other regions. Among the countries hardest hit by the novel coronavirus are China and Italy, which coincidentally are the hub for most of car parts production. The shortage of car parts implies that 2020 won't be a strong year in terms of car sales.
Automakers, just like any businesses, need revenue to stay afloat through this period. Consumers, on the other hand, are reassessing their priorities and reluctant to part with badly-needed cash. Thus, the whole situation translates to better car deals. This is why car companies are currently offering better-than-usual deals for their vehicles to attract customers.
You can still buy a car even though most showrooms around the world are closed. Most experts agree that capitalising on these deals, and getting a vehicle during this period is an intelligent decision.
How good are the deals?
From the price tag perspective, the deals may not look that attractive. That doesn’t necessarily mean you should back off, no. This is because you might get a much better deal if you trade-in your old car.
Karl Brauer, an automotive industry expert, believes the incentive is exceptional for any potential car owner who had plans to buy a car.
Brauer lays out their offering, which includes 0% financing for 6-7 years and deferring of the first payment for 60 or 90 days with 0% interest, both of which translate up to real money savings. He added that some automakers, like Fiat Chrysler, Kia, and Volkswagen, are offering both incentives simultaneously.
There’s a common saying in society that states you should never let a serious crisis go to waste. The current situation is a perfect scenario to apply this. If you don’t own a car and commute via public transit, you will find this ideal, especially if you still need to go to work.
Some of the automakers offering flexible deals include Hyundai, Ford, Genesis, and General Motors.
Are the deals expected everywhere?
No doubt, some people plan on leveraging lower prices brought about by the crisis. However, keep in mind that not all automakers will offer incentives. A Reuters report from March showed that there hadn't been a massive drop in US car sales which might suggest that there won't be special discounts for cars.
Virus or no virus, it is important to remember that most dealerships offer great deals, and it is a good idea to take advantage of these offers whenever they arise. You can also negotiate prices with the salespersons.
Avoid contact if you choose to buy a car now
We recommend you do your research and, if possible, buy the car online to avoid interactions that could cause coronavirus infection. Nevertheless, you should still carry out the test drive to confirm you are getting what you want.
“Every other component in buying a car can now be done online, including financing, insurance, and even signing the final paperwork. Consumers should be able to find a dealer offering all of these services,” Brauer sums it. While at it, don’t go for a car that will blow up your budget.
COVID-19 could delay the release of new models
The suspension and closure of most plants mean most automakers might be unable to meet their 2020 annual production targets. New car models expected in 2021 may also be delayed. But some automakers have started opening up factories in regions where the pandemic has been contained. It means there is a chance that automakers can overcome the challenges and eliminate any delays.
Car deals & warranties offered in Australia today
The novel coronavirus has hugely restricted movement in most areas, and Australia is no exception. Restrictions have been introduced for non-essential workers wishing to travel. Car insurers in Australia, in fact, are currently offering low rates during this pandemic period due to reduced risks.
After a significant reduction in car crashes due to the travel restrictions being implemented, one car insurer is offering lowered premiums in the next three months. Youi insurance company announced a 15% discount for both existing and new customers.
“Given the decline in driving at the moment, premiums can be lower,” said Youi CEO Schreuder. For those three months, a partial refund is available for existing Youi customers. There is a possibility that the offer will be extended beyond three months, depending on the situation. Stay tuned and follow our news to get updates on this issue and other automotive concerns.
By Sam O.