Within the many economic repercussions of the COVID-19 pandemic in the United States, auto dealerships were greatly affected by the sudden downturn in sales. There is no question that the automotive industry is just as important as real estate for the American economy; this means that a portion of the $2 trillion economic stimulus package signed by President Donald Trump will be destined towards the automotive marketplace, but dealers will have to make some adjustments to accommodate the new behaviors of prospective buyers.
When automakers were forced to halt production through April 2020, many American dealerships sought to keep their inventory moving by means of paying greater attention to their e-commerce business models. Buying a car online is something that dates back more than a decade, but few dealerships sought to make this their primary means of selling cars; for the most part, they have been embraced internet marketing but prefer to stick to the traditional process of inviting buyers to lots and showrooms for the test drive and bargaining rituals.
The social distancing measures ordered by health officials during the pandemic prompted car buyers to go online to research their potential purchases. Smart buyers know that dealerships are cash flow businesses; to this effect, they also know about the need to avoid inventory stagnation, which is when they are more likely to find great deals.
One of the most often mentioned car buying tips revolves around timing; for example, common wisdom tells us that the Memorial Day three-day weekend is a good time to visit dealerships in order to find traditional discounts and special offers. For Memorial Day 2020, hopeful expectation that pandemic restrictions would be eased resulted in dealers paying greater attention to their online sales channels. We are seeing more enticing incentives for prospective buyers who not only research new cars online but also prefer to get most of the financing paperwork done on their PCs, laptops, tablets, or smartphones.
We hope that financial regulators and lawmakers do their part to accommodate both car buyers and dealerships. Digital signatures must become standard, and the same goes for title, insurance, registrations, and license tag services. There is no way to get around the test drive; however, some dealerships have already come up with scheduling systems that adhere to social distancing guidelines.
In the end, the new reality of car buying in the post-pandemic period will largely unfold online, and this is where prospective buyers are bound to find more discounts and special deals. It will be up to dealers to migrate their business models so that the purchasing experience can take place on internet sales channels as much as possible. The automotive industry has previously gone through economic hardships such as 9/11 and the Great Recession; bouncing back has not been a walk in the park, but it has been accomplished. As for buyers, looking for deals and negotiating final prices as well as terms will never go away, but it will become a mostly digital experience.