2020 was a year of unprecedented change brought about by the necessity of self-preservation. While many of those changes were left behind in 2020, many other consumer behaviors will conform to a "new normal" for 2021. The auto industry is not immune to such changes. Shifts in the way consumers think about transportation and used car acquisition continue to evolve. What does this mean to the automobile industry's future, and how can VETTX help dealerships prepare for both temporary and permanent consumer behavior changes?
Vehicle Purchase Preferences
Restaurants closed their dining areas and moved to delivery or pick-up options. Drive-by birthday parties, virtual holidays, and Zoom meetings have become routine. Consumers expect the same options for their vehicle shopping needs. More and more consumers are shopping online and having their vehicle purchases delivered. This allows them to make more informed and less emotional purchases in uncertain times and reduces personal health exposure. Adjusting to a changing climate by offering multiple automobile purchase channels will be a hallmark for the future of automotive dealers.
Used Car Acquisition
Used car sales have become more and more common recently. The increased demand has led to lower available used car inventory and retained value. Dealerships will need to focus their efforts on used car acquisitions to meet this demand and maintain profits. But why are so many consumers purchasing used cars right now? Here are a few key reasons:
Decline of Public Transit
The popularity of ride-share programs and public transit came to a sudden halt in 2020. Commuters are just not as comfortable sharing tight, enclosed spaces as they have been in the past. Furthermore, a report by Genomatica revealed that 1/3 of Americans state they don't intend to ever return to public transit. This means that the public is finding new ways of transportation - and trends show that means purchasing used vehicles.
Reduction in Commuters
2020 saw a drastic reduction in commuter travel. As businesses moved their employees home to reduce COVID-19 exposure, schools closed, and social activities were canceled, it made less sense for families to allocate resources to new car prices. With public transit considered an unsafe choice, used cars became the next obvious choice.
The closing of vehicle manufacturing plants early in 2020 meant a reduction in available inventory for new vehicles. Like many other industries, such closings left individuals out of work. Political conflict, social unrest, unemployment, and health concerns have led families to be more financially aware. Vehicle purchases are now becoming less about prestige and more about a safe, practical means of transportation.
What Does This Mean for Automotive Dealers?
There is a tremendous opportunity for dealers ready and willing to be in-tune with changing consumer behavior and are agile enough to adjust to those changes in the used car acquisition market. Used cars aren't as easy to obtain as purchasing from an automotive manufacturer. Exploring new acquisition methods for in-demand used car inventory will make all the difference in successfully navigating a changing automotive market in 2021. VETTX can help dealers search the private party market and purchase used vehicles at scale for a successful 2021 and beyond.