The new car smell of 2020 is disinfectant.
“When I got in to test drive, everything smelled like Lysol wipes,” said Candace Chentel of Orlando.
Chentel, 32, bought a 2011 Jeep Liberty from Orange Buick GMC in Orlando at the beginning of July. She found what many other customers, salespeople and analysts have learned: the coronavirus outbreak has changed the car-buying experience in some ways that may be around for a long time.
Roger Deally, general manager at Holler Honda in Orlando, said that, like most industries, car sales were blindsided by how to operate at the beginning of the pandemic. “The first impression is that nobody knew what to make of it,” he said.
Sales plummeted nationwide throughout March and bottomed out in April. Lockdowns and general uncertainty about the disease kept buyers away while dealers were also getting hit with a catastrophic loss of inventory.
“Never in the history of the auto industry has nearly every car plant around the world, including those in North America, shut down,” said Michelle Krebs, an industry analyst for Cox Automotive, parent company of Kelley Blue Book and Autotrader.
Having suffered heavy losses during the Great Recession in 2008, manufacturers responded to the latest crisis swiftly.
Car companies brought out tools that they hadn’t used since then, which included zero percent financing for 84 months, Krebs said.
At the same time, dealerships started adopting new safety practices, which at times has meant changes to the culture of auto sales, according to Deally.
“The handshake was a common greeting, and now that’s a thing of the past,” he said.
A 21-year veteran with the Holler-Classic Automotive group, Deally says salespeople are still finding ways to connect. “We try to smile through our masks and show it in our voice and our eyes,” he said.
Chentel wasn’t motivated by manufacturer incentives, most of which ended in May, or by safety measures.
She had lived without a car for more than a year, but once she was furloughed from her job as a restaurant supervisor at the Rosen Centre in February, transportation became a bigger issue.
“Looking for a job required me to travel a lot farther than where I generally was,” she said. “I went from having easy access to transportation and cheap rides to needing to get to Kissimmee for an interview.”
As with many buyers, Chentel began her search online, looking for the vehicle she wanted.
Deally said the online portion of the buying experience has gone into overdrive during the pandemic. “It was happening, but we saw a sharp increase in the amount of traffic we were getting online prior to a visit,” he said.
Krebs, who is based in Detroit, said this virtual car shopping is one change that buyers should expect will stick around.
“This is the way of the future,” she said. “What the pandemic did was accelerate what consumers have been wanting for a long time and it’s not going away.”
Having bought her first car in 2015, Chentel discovered another difference in the process the hard way.
“When I first just went by [the dealership] to see it, they told me I had to have an appointment to come by,” she said.
A sales rep at Orange Buick GMC said in a phone call that the dealership has not required appointments but has highly encouraged them when looking at specific cars during the pandemic.
“I saw them a day later. They had to sanitize and detail the car before we could test drive it anywhere,” Chentel said.
Deally said that sanitizing everything from cars to the office has become “a way of life” at his dealership.
“The process is still about the same as it was with the exception that we make sure every car is sanitized and wiped down.” He said masks are also required on test drives and in the building.
Home test drives and touchless delivery are other services that have seen sharp increase during the outbreak.
Deally said Holler had offered these services for years, but customers are really taking advantage of them now.
“We had that come up every now and then before, but now we’re doing maybe 10 to 15 percent of our business that way,” he said.
Chentel considered buying entirely online and having the car delivered by one of the dealers such as Carvana, who offers a seven-day test period with a car before the sale is final. But Chentel wanted to be able to have someone she could physically contact if there were problems with the car.
“I had problems with the car after I got it,” she said, noting issues with the alignment and shocks. “But instead of having to call Carvana to pick the car back up, it was much easier to just take it back to the dealership.”
Deally says he’s seen something besides the sanitation measures bringing in new customers.
“Better air conditioning,” he said. “With the heat in Florida, a lot of the technology in the newer cars lets you start the air conditioning before you even get into the vehicle.”
Dealerships are still dealing with a shortage of new cars caused by auto plants not being back up to full capacity. A public radio station in Ohio last month reported that clerical staff at a Honda plant had been ordered to work shifts on assembly lines.
Krebs said the shortage might last into next year.
Low inventory means the cars that are for sale are commanding higher prices, but it also means good news for customers with trade-ins to bring to inventory-starved dealers.
“We’re seeing all-time high values on trade-ins right now,” said Deally. “Your car is worth substantially more than it was prior to COVID.”
Used car values hit a record average of over $20,000 in the first half of August, according to Cox Automotive research.
Sales have started to move upward again, though total sales are still down 22 percent over last year, according to Krebs.
“Sales aren’t back to what they were, but they’re stronger than you might anticipate in a recession,” she said. “People were postponing purchases because of the virus … Now it’s purely financial.”
Krebs sees it as a simple formula. “When the virus numbers are down, the car sales go up,” she said.
While that’s true for most states, Florida, which saw soaring COVID numbers over the summer, has also beaten the national average for new car sales. Krebs noted that retail sales, excluding fleet sales, are down 17 percent nationally, but only 15 percent in Florida.
“You are a different animal in Florida,” Krebs said.
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