What does COVID-19 mean for car buyers?
We’ve put together a rundown of what new and used car buyers should expect when buying or renting a car amid the coronavirus pandemic. While most states have reopened to varying degrees, soaring infection rates have prompted some states to reimpose restrictions in the run-up to stay-at-home orders.
New online shopping options and social distancing measures can help keep shoppers safe. In addition, some manufacturers offer new incentives. But is it really a good time to buy a car in the midst of COVID-19? Read on for our analysis of what this unprecedented situation means for buyers.
Originally published March 18. Updated December 7.
Are car dealerships open or closed?
Most dealerships are now open for business, although state and local guidelines may vary after federal guidelines for essential services were extended to include car sales in April. In many cases, in-person showroom tours are possible, but you may be advised to make an appointment in advance.
Expect dealerships to implement safety measures like social distancing, improved sanitization, and electronic signature options to save time and limit unnecessary in-person contact. You may need to wear a mask or face covering, so be sure to prepare for what might be needed in your area.
Many dealerships are almost 100% digital. Whether it’s virtual chat or FaceTime consultations, online auto loan approvals, or even free door-to-door delivery, car dealerships make it easy to buy or lease a car in most areas of the world. country.
We recommend that you contact your local dealers to find out how each is reacting to the situation. Restrictions on coronaviruses can be fluid depending on infection rates, so be prepared for anything, especially as we move into the colder months.
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Is it safe to buy a car?
According to the CDC, “The best way to prevent the disease is to avoid being exposed to the virus.” The agency adds that the virus “is believed to be spread primarily person-to-person” between individuals in close contact and via respiratory droplets passed through the air.
While everyone is at risk, the elderly and those with chronic illnesses may be at higher risk of complications. The agency also says that “people who are infected but do not show symptoms can also spread the virus” (this is called asymptomatic spread).
Dealers are taking steps to help protect customers with special measures such as limiting capacity and encouraging social distancing of at least 6 feet when possible. In addition, dealers have increased the disinfection of facilities and vehicles.
Unfortunately, the risk of infection remains high in many parts of the country without a vaccine. However, not all car buyers can have the luxury of time when faced with factors such as an expensive car repair or the end of a new car lease. In some cases, automakers have offered to extend leases.
Fortunately, there are things you can do to save time at the dealership. For example, CarsDirect offers target prices to help you with your negotiation, as well as the latest information on manufacturer incentives. You can also compare specs, view photos, watch video reviews, all from the comfort of your own home.
Remember to celebrate your purchase with a nudge or wave of thanks rather than a handshake.
Is it a good or a bad time to buy?
A lot has changed in the past 8 months. In March, all of the major automakers started offering better deals and better support. A host of current 0% APR offers offered the potential to save thousands of dollars in long-term interest charges compared to pre-pandemic offers.
Manufacturers also offered buyers unprecedented flexibility. For example, VW did not introduce any payments for 6 months across almost its entire range plus integrated protection against job loss in the event that a buyer loses their job due to COVID-19.
Likewise, Ford introduced a program called Ford Promise involving up to $ 15,000 in qualifying job loss benefits. However, the incentive changed on October 1 and is now focused exclusively on used and certified Fords.
Stunning rates have even made their way to used cars with 0.99% financing on factory certified vehicles from brands like Toyota.
However, the decision to make a large commitment like buying a car will most likely depend on your situation. While many buyers have flocked to 0% financing, we recommend that consumers select the best car for their needs rather than just looking for a particular deal.
A number of auto factories have halted production to protect workers and respond to an anticipated drop in demand. Toyota and Subaru have faced some of the worst inventory shortages of any brand. In some cases, consumers may see car prices rise as a result.
Buyers of trucks are facing a particularly difficult situation. For example, truck offers involving low APR have been cut back by companies like Ford and GM. Coupled with reduced selection, the odds of getting a deal are dramatically different than at the start of the year.
Do you have bad credit? Car buyers at risk could face deteriorating credit conditions. Lenders tightening their auto loan requirements could make financing more difficult. As a result, consumers may need to work with a dealership that specializes in bad credit auto loans.
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Are There COVID-19 Car Deals?
We have seen a dizzying array of buying and leasing incentives. However, the best deals have usually revolved around financing. For example, GM offered 0% APR for 84 months on select models in March. Even Subaru cut rates across its entire lineup to 0% for 63 months.
We’ve also seen mainstream brands like Hyundai offer one of America’s cheapest leases on the 2020 Elantra. Even ultra-luxury brands like Maserati have introduced 0% APR for 84 months, the Porsche sports car maker offering low interest financing and no payments for up to 90 days.
Some brands have introduced larger loyalty discounts to prevent consumers from turning to a competitor. For example, Honda launched a rebate of $ 1,000 on top of better finance rates. That said, buyers should keep in mind that the best deals are often only available to those with prime credit.
It is also important to know that many of these offers come with a trap. For example, Ford offered 0% APR for 84 months, but only on 2019 stock. FCA introduced a similar deal on a wider range of model years, as well as employee rates on Chrysler Pacifica cars. , Jeep Wrangler and Jeep Gladiator.
Unfortunately, a lot of these deals have come and gone. You can still find 0% APR for 84 months, but on a lot less vehicles than before. In general, expect to see the best deals on popular models. That said, 84 month financing isn’t for everyone and we recommend that you carefully consider all of your options.
Those who plan to buy and hold their vehicle for a long time may find these offers attractive from the perspective of lowering their monthly car payment. Make sure you consider the risk of buying an asset that depreciates and ending up in a situation involving the possibility of having negative equity.
Healthcare workers may be eligible for special discounts worth up to $ 2,500 in more than half a dozen brands. Mazda has even started offering free oil changes to help frontline workers. One of the more substantial offers came from GM with supplier pricing combined with lower finance rates.
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Will future vehicles be delayed?
Automakers have been busy adjusting production of key vehicles for safety reasons and due to an expected drop in demand. GM has reportedly delayed launches like the updated Chevy Equinox for up to a year. Likewise, Ford delayed an initial reveal of the redesigned Bronco.
Those eagerly awaiting Cadillac’s next EV lineup can wait after the reported delay of the new Lyriq all-electric crossover SUV. Even the famous Detroit Auto Show was canceled. In addition, several car launches in the spring were delayed.
Another example is Genesis, Hyundai’s luxury brand. The all-new GV80 crossover has been delayed until this fall due to COVID-19. Meanwhile, Toyota is limiting production of the new RAV4 Prime. Coupled with strong demand, we have seen extreme mark-ups at dealerships.
Unfortunately, the long-awaited Chevy Corvette was badly affected by the production shutdown and Chevy stopped taking orders. Since production has already been cut by 20% and base Corvettes are virtually non-existent, buyers will likely be forced to purchase a 2021 model.
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