As we approach the one-year mark since the start of the pandemic in Canada, we checked in with car shoppers on the autoTRADER.ca Marketplace to gain a better understanding of their purchase intentions going into 2021. Across the month of January, we surveyed 300 Canadian car shoppers who intended to purchase a vehicle within the next six months. The final read of the results shows a positive outlook for automotive sales in 2021, particularly for dealerships who continue to invest in online.
Throughout the COVID-19 pandemic, both new and used vehicle purchase intent within a six-month timeframe remained stable. This metric has fluctuated between 16-18 per cent over the past few months; sitting today at 17 per cent.
As dealerships have become more transparent with how the car buying process plays out, while taking into consideration physical distancing requirements, consumers feel more confident in progressing with the purchase process. Consumers have adapted and become accustomed to the information and tools to shop safely online, resulting in completing more of the car buying process ahead of stepping foot into a dealership.
These factors likely shortened the time it would take to buy a vehicle today. Back in March of 2020, 72 per cent of shoppers said it would take them longer than usual to purchase a vehicle due to the pandemic. This number has sharply declined to 46 per cent of respondents stating their intention to extend the timeline of their vehicle purchase. As we’ve recommended before, dealerships need to continue to provide shoppers with a variety of online shopping tools, safe ways to conduct a visual inspection and embark on test drives, as well as a seamless purchase process. A streamlined process is much more attractive for buyers, as well as dealers, which may in fact become a mainstay on the other end of the pandemic.
Used car shoppers identify automotive marketplaces (57 per cent), dealership websites (32 per cent) and manufacturer websites (39 per cent) as the top online sources used during their car buying journey. As expected, the activities that require more in person contact, such as visiting dealerships and talking to friends and family, have decreased since early in 2020.
Looking at triggers to purchase a vehicle, the results have remained consistent with previous research waves. The top two triggers are: considering a purchase due to current vehicle age (29 per cent), and, the desire to upgrade to something newer/nicer (24 per cent).
With the January spike in cases across most Canadian provinces, there is an uptick in the concern of COVID-19 as worsening, since our last touchpoint with car shoppers. What’s interesting to note is that although there is growing general concern surrounding COVID-19, there aren’t any changes to the level of concern about the economy, personal finances, or purchase affordability. Actually, these figures have decreased. At the beginning of the pandemic, 68 per cent of shoppers said they would consider delaying their purchase due to COVID-19, whereas today, that number has decreased by 20 points to 48 per cent. In terms of affordability, previously 56 per cent of consumers said that they were nervous about being able to afford a vehicle due to the pandemic, while in our most recent research, that figure has decreased to 38 per cent.
When asked whether now is considered a good time to make a major purchase, 40 per cent agreed that it is, while 23 per cent stated that they do not agree. What’s more, 48 per cent of consumers shared that due to the pandemic they were able to put more money towards savings, to fund a larger purchase.
What we’re seeing through these results is that vehicle purchase intent remains strong and unchanged in 2021. Online resources continue to be the most prominent source of information, meaning, if you’re not where shoppers are, you risk missing out on potential sales. To continue to see success in your dealership operation, ensure that you’re investing in the right online platforms, such as being present on automotive marketplaces and having a strong dealership website. Don’t second guess your investments in online tools, such as the Remote Selling Suite or even Digital Retail, as these remain quintessential to beginning and completing many more stages of the car buying journey online.
Lilian Lau, VP Marketing, TRADER Corporation