Market Update: Coronavirus and Cars

Car Manufacturers
Photo Credit: Dodge, Nissan, Acura, Ford.

We’re heading into the final months of 2020 and to say it’s been an unexpected year is an understatement. The pandemic that began in the spring is still underway and will continue for the foreseeable future. Just this week, the U.S. coronavirus death toll passed 200,000.

Staying at home as much as possible, avoiding crowds and wearing a mask are the new normal. On a daily basis we are all encouraged to follow CDC guidelines to help prevent the spread of COVID 19. Hand sanitizer is now a must-have item and disinfectant wipes are in continuously short supply.

Both consumers and businesses have been forced to embrace a new environment of interacting and doing business, whether that’s enacting new safety protocols at the workplace or going virtual via Zoom meetings. Some people are even working from their vehicles. The latter is just one example of how vehicles remain an integral part of our lives and why the automotive industry is an important part not just of the economy, but of how we live, work and play.

In fact, people may not be commuting as much these days, but, as we recently reported recently in the Car Pro Newsletter, there is a resurgence in road trips in the age of COVID. In a Chevrolet/Harris Poll survey, of those planning to road trip through the end of the year, 41 percent of respondents said they plan to take a road trip over Thanksgiving or the winter holidays.

Car Buying During COVID

By the very nature of providing transportation, auto dealers provide an essential service to the communities they serve. CarProUSA Certified dealers have been outstanding in their efforts to continue to provide that service through car buying services through these difficult times. While showrooms are open now, many were closed earlier this year and dealerships conducted business solely online, providing home deliveries. (Most service departments have continued to remain open.) They are doing this all while keeping the health of employees and clients as their number one priority.

If you’ve been in the market to buy a car this year, you’ve probably found some pretty great deals. The pandemic has resulted in a year of some amazing incentives on new vehicles. But it’s also meant more popular vehicles were hard to find. At the same time, low inventory brought on by factory shutdowns created a sky-high used car market over the summer, which is good news for people who have a trade-in.

So how does the market look for car shoppers as we head into the final months of 2020? Here’s how things stand today.

Are Dealers Still Facing Inventory Shortages?

Inventory shortages are definitely lessening as manufacturing returns to normal levels, but they still exist, especially on in-demand vehicles. A great example would be the in-demand Kia Telluride and its sibling the Hyundai Palisade. The Telluride had the lowest inventory of all Kia models at 24 days’ supply at the end of August and the Palisade even less at 17, according to a Cox Automotive analysis. Also at the end of August, Subaru almost had no inventory of the Crosstrek or Ascent. Full-size luxury SUVs have been in notably short supply. Cox says the biggest shortages in the non-luxury market have been pickup trucks. Toyota’s low supply of the Tundra and Toyota is one example. Check out more of the detailed Cox report here.

Is COVID Still Impacting Used Car Sales and Trade-In Values?

COVID did greatly impact used car prices, sending values sky-high over the summer because of inventory shortages due to closed manufacturing facilities. But as more new vehicle inventory arrives on lots, the market is shifting. As Car Pro Show host Jerry Reynolds mentioned recently on the Car Pro Show, it’s becoming more a new car market again. However, Jerry says even though the used car market has dropped in recent weeks, it remains strong and "is much higher than it was pre-Covid." So what this means is that this is still a great time to trade in a vehicle.

Is This a Good Time To Buy a New Vehicle?

Yes. Jerry says "New vehicle inventory on dealers’ lots is increasing daily, and to make sure 2020 isn’t a sales disaster, automakers are upping incentives." If you think you may be doing something in the next 60 days or so, he recommends making that decision in September, to take advantage of extremely aggressive incentives.

Also keep in mind the fall season is when automakers begin to roll out 2021 models, which generally means great deals on the 2020 models. Although according to a Cox Automotive analysis, the rollout is occurring slowly this year. In its recent report, Cox said that only 2.5% of new-vehicle inventory consisted of 2021 models. Last year at this time, it cited that new models represented 19% of new-vehicle inventory.

That said, some of the new 2021s that just went into production and will arrive this fall include the all-new Ford F-150 and all-new Nissan Rogue. The 2021 Acura TLX Sport arrives this month. Other new 2021s we can expect to see by the end of the year include the 2021 Escalade, Genesis GV80, the new hybrid Toyota Sienna, the 2021 Ram 1500 TRX and the Hyundai Elantra.

Check out Jerry’s appearance on Fox26 Houston for more on the status of the used car market, plus what to do if you have a trade-in.

Can I Get Help With Car Payments?

Unemployment remains high. If you’ve been impacted by job loss during COVID-19 and need help making car payments, many automakers will discuss relief payment options with you. Contact your automotive finance company for options and details.

How Can I Protect My Vehicle From COVID-19?

Nothing is 100% sure-proof when it comes to killing the coronavirus, but there are steps you can take to mitigate the threat. They involve carefully disinfecting your vehicle after each use (using disinfects and soft cloths that won’t harm its interior.) You can find tips on disinfecting your vehicle here.

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