cargurus covid-19 sentiment study: how the pandemic

CarGurus COVID-19 Sentiment Study: How the Pandemic Impacted Automotive Sentiment in 2020

United States

What’s happened so far & where do we go from here?

Looking back, the pandemic presented new barriers for buyers, which is why we’ve seen purchase delays continue

throughout 2020. On the other hand, we’ve also consistently seen shoppers enter the market for a vehicle who otherwise

wouldn’t have. Whether it was because an immediate need arose out of disruption to daily routines, or because they

wanted to treat themselves to something fun, the pandemic did introduce new buyers to the market as well.

Looking forward, nearly all purchase delays from 2020 will eventually come to an end. Shoppers do have concerns

about their financial security and health/safety though. As a result, more are turning to solutions like financing, contactless

services, and even digital retail. These solutions make it safe and possible for many to buy, which is especially appreciated

now that vehicles are seen as a source of fun and escape during these difficult times.

Topics in this report include

How shoppers see the market

• Inventory & pricing perceptions

What is causing shoppers to buy or delay

• Why buy, why delay

How dealers can address shoppers’ purchase barriers

• Money matters

• Going digital

• Safer shopping

• Commutes, out. Road trips, in.

Methodology

Throughout 2020, CarGurus has surveyed over 2,000 shoppers on their sentiments toward car shopping during the COVID-19 pandemic. Most recently in November, CarGurus surveyed 796 shoppers who had intentions of buying a vehicle in 2020 or 2021. CarGurus also surveyed 779 shoppers in June and 722 shoppers in April for earlier iterations of this benchmarking study.

Results are reported among all respondents in November unless otherwise indicated. Where appropriate, results are also reported among:

• 2020 pandemic buyers: purchased during the months of March - November 2020

• Current shoppers: currently plan to purchase in 2020 or 2021, but have not purchased yet

Inventory & pricing perceptionsThe pandemic has disrupted vehicle production, and shoppers have felt that impact over the course of 2020. However,

buyers have had very different perceptions of selection and price depending on the months when they bought.

Looking back: Those who bought during the early months of the pandemic—March through June—were nearly 2x more

likely to say prices were much lower than expected, compared to those who bought later in 2020—July through November

(31% vs. 16%). These earlier shoppers were also fortunate to have a better selection of vehicles on dealership lots. Only 8%

of those who bought from March to June said the selection of available vehicles was much worse than expected, compared

to 17% of buyers from July through November.

Looking forward: Inventory concerns have eased; however, shoppers assume the great deals during the early days of the

pandemic are over. In fact, 26% expect prices to be higher. As a result, shoppers are staying open-minded about what

vehicles to consider: 62% are considering more than one brand; 42% are considering more than one type of vehicle.

Why buy, why delayOver the course of the pandemic, we’ve continued to see

purchase delays. Shoppers who have already bought a vehicle

cite a mix of need and want as motivators, while those who

delay their purchase cite financial security, changes in rou-

tines, and fear of spreading the virus as barriers.

Looking back: Among those who did buy during the

pandemic, the top motivator to not delay was because they

had an immediate need (50%). The desire to have a vehicle

for personal travel, leisure, hobbies, or projects was another

top motivator (27%). For these reasons and more, some

shoppers entered the car market who otherwise wouldn’t

have. 30% of those who bought in 2020 were not planning

to before the pandemic.

42% are considering more than one type of vehicle62% are considering

more than one brand of vehicle

Money mattersAffordability concerns have impacted both those who bought during the pandemic and those still shopping today. 44% of

total respondents said they were less confident in their ability to afford a vehicle as a result of the pandemic. Consequently,

demand for financing grew. Before the pandemic, 48% were planning to finance. Now, 62% plan to (or did).

Looking forward: Shoppers say the top reasons they delay vehicle purchases revolve around financial security. 51% of those

who delayed their purchase said they are uncertain about their personal financial situation, and 45% are uncertain about

the general economic situation. Uncertainty about changes in daily routines—like childcare or work from home (36%)—and

fear of spreading the virus (29%) are other top motivators for delaying a vehicle purchase. But nearly all (90%) of people

who planned to buy in 2020 before the pandemic have already purchased, or plan to by the end of next year.

51%

45%

36%

29%

Uncertain about personal financial situation

Uncertain about general economic situation

Uncertain about changes in daily routines

Concern about putting myself or others at risk

48%

62%

Pre-pandemic

Current

Looking back: Financially secure shoppers were less likely to delay buying during the pandemic, though that wasn’t the case

for everyone. Among those who already bought in 2020, 37% are less confident in their ability to keep up with monthly

payments now vs. before the pandemic—consistent with June, 39%.

Looking forward: Selection of affordable vehicles is a top concern among buyers going forward. 46% of current shoppers

feel less confident in their ability to find a vehicle they can afford. For current shoppers hoping to find a vehicle under $10K,

that number is even higher: 54%. As a result, demand for financing remains strong.

Reasons for vehicle purchase delays

Plans to finance vehicle purchase

Going digitalAt the start of the pandemic, shoppers expected they’d return to their normal shopping habits fairly soon—which most have

come to accept is no longer the case. As the pandemic continues, comfort and familiarity with online tools grows. Now, car

shoppers increasingly consider digital retail.

Looking back: When CarGurus released its first COVID-19 Sentiment Study in April, 61% believed normal economic activity

would resume in their area by October. Now in November, 88% of respondents say it will be quite a while until shopping

habits return to normal, if ever. Some new ways of shopping will continue even after the pandemic.

Looking forward: With mandatory shutdowns in the beginning of the pandemic, many shoppers considered the idea of

buying online for the first time. As a result, openness and preference for digital retail surged. Before the pandemic, 35% of

respondents said they were open to buying online. Now, 60% of respondents are open to the idea. This openness to buying

online has not wavered since June (60%) or April (61%)—despite re-openings. Still, only 41% would prefer buying online

(19% pre-pandemic). Shoppers are more likely to prefer online price negotiation (61%) and online financing (52%).

Safer shoppingDespite growing interest in digital retail, even during the

pandemic most shoppers (59%) still prefer buying in-store.

Shoppers do expect dealers to take appropriate

precautionary measures, though. That includes offering

contactless services.

Looking back: Expectations for what precautionary measures

dealers should take have shifted over the course of the

pandemic. Compared to June, fewer shoppers expect

dealers wiping down surfaces (58% Nov, down from 73%

June) and more care about mask-wearing. 67% of shoppers

expect employees to wear facemasks, up from 63% in June,

and 61% of shoppers expect customers to wear facemasks,

up from 52% in June.

35%

61%

60%

60%

Pre-pandemic

April

June

November

Openness to buying a vehicle online

Commutes, out. Road trips, in.The pandemic has been an incredibly disruptive force in peoples’ lives, and many have changed the way they use and view

their cars as a result.

Looking back: Vehicles offered people a sense of escapism and fun during the pandemic. 47% expected to use their car

more for road trips or longer drives, and 43% agreed that they see their cars as a source of escape or fun during this time.

Looking forward: The pandemic was a major disruptor to daily commutes, with 24% of respondents noting they expect to

work from home more going forward. As of November, 34% of previous rideshare users and 45% of public transportation

users expect to decrease or stop their use of these services. This has remained fairly consistent over the course of the

pandemic (39% in June and April for ride sharing; 45% in June, 44% in April for public transportation).

Looking forward: Contactless services continue to be in high demand. 84% of current shoppers prefer using at least one

contactless service. Shoppers are most interested in private dealer appointments (51%), test drives at home (38%) and

virtual or video tours of the vehicle (31%). A quarter of shoppers are interested in delivery (25%) or curbside pickup (24%).

84%

51%

38%

31%

Any contactless service

Private dealer appointments

Test drives at home

Virtual/video tours of the vehicle

Home delivery

Curbside pickup

25%

24%

43% see cars as an escape or for fun47% expect to take

more road trips or longer drives

Interest in contactless services when car buying

Detailed resultsResults are reported among all respondents in November unless otherwise noted. Before COVID-19, did you intend to purchase a new or used vehicle in 2020? among those who bought in 2020 (“pandemic buyers”)

Yes 70% No 30% What is/are the reason(s) you decided not to delay your purchase as a result of COVID-19? among pandemic buyers

I had an immediate need to buy a vehicle 50%I wanted to buy a vehicle for personal travel, leisure, hobbies, or projects 27%I felt certain that my personal financial situation wouldn’t change 26% Sellers were offering deals that aren’t usually available 23%I felt certain that I could shop safely 20%I wanted to treat myself 16%I did not want to rely on public transportation, ride-share, or taxis 14%An exciting new model came out that I wanted to buy 12%I wanted to support local business 8%I received a stimulus check 5%I suspected dealer lots would be closing soon 5% What is/are the reason(s) you delayed your purchase as a result of COVID-19? among current shoppers

I am/was uncertain about my personal financial situation 51%I am/was uncertain about the general economic situation 45%I am/was uncertain about my personal routine (WFH, childcare, etc.) 36%I am/was concerned that shopping would put myself or others at risk 29%I can/could no longer afford the purchase 28%I no longer have/had an immediate need to buy a vehicle 24%Vehicle prices are/were higher than usual 20%Dealers have/had fewer vehicles in stock, due to the pandemic 16%I heard about an exciting new model coming out soon 12%Dealer lots are/were closed 12% Are you actively researching vehicles during this time?among current shoppers

Yes 71% No 29%

What brand(s) of vehicle are you considering? among current shoppers, showing top five results

Toyota 35%Honda 30%Ford 25%Chevrolet 25%Nissan 17%

More than one brand 62%

What type(s) of vehicle are you considering? among current shoppers

SUV/Crossover 59%Sedan 34% Pickup truck 19%Coupe 16%Hatchback 14%Minivan 13%Convertible 10%Wagon 5%

More than one type 42%

As you are/were shopping, how did/do you feel the pandemic impacted vehicle prices?among those who bought in March-June vs. in July-November Mar-Jun buyers Jul-Nov buyers

Prices seemed much higher to me 5% 2% Prices seemed somewhat higher to me 5% 12% I don’t think the pandemic has/had impacted prices 36% 39%Prices seemed somewhat lower to me 23% 32%Prices seemed much lower to me 31% 16%

Much/somewhat lower 54% 48%

As you are/were shopping, how did/do you feel the pandemic impacted the selection of vehicles available?among those who bought in March-June vs. in July-November Mar-Jun buyers Jul-Nov buyers

The selection of vehicles seemed much better to me 7% 2% The selection of vehicles seemed somewhat better to me 10% 8%I don’t think the pandemic has/had impacted selection 41% 46%The selection of vehicles seemed somewhat worse to me 34% 27% The selection of vehicles seemed much worse to me 8% 17%

Much/somewhat worse 42% 44%

How has/had COVID-19 impacted your plans about vehicle financing? Jun 2020 Nov 2020

I was not planning to finance, and I still don’t plan to (or did not) 22% 20% I was not planning to finance, but now I do (or did) 18% 18%I was planning to finance, and I still plan to (or did) 42% 43%I was planning to finance, but now I do not (or did not) 8% 5% Not sure 11% 14%

Previously planning to finance before COVID-19 49% 48% Now planning to finance (or did) 60% 62% How has/had COVID-19 impacted your confidence in your ability to afford a vehicle purchase? Jun 2020 Nov 2020

Much more confident 2% 3%Somewhat more confident 6% 8%About the same 44% 45%Somewhat less confident 38% 30%Much less confident 11% 14%

Somewhat/much less confident 48% 44%

How has/had COVID-19 impacted your confidence in your ability to find a vehicle you can afford?among current shoppers vs. current shoppers considering vehicles under $10K Current shoppers Current shoppers <$10K Much more confident 2% 0%Somewhat more confident 8% 5%About the same 44% 41%Somewhat less confident 33% 32%Much less confident 13% 22%


How has/had COVID-19 impacted your confidence in your ability to get approved for vehicle financing?among those that considered financing Jun 2020 Nov 2020



How has/had COVID-19 impacted your confidence in the financing rate you expect?among those that considered financing Jun 2020 Nov 2020



How has/had COVID-19 impacted your ability to keep up with monthly payments?among pandemic buyers Jun 2020 Nov 2020

Much more confident 5% 7% Somewhat more confident 10% 11% About the same 47% 45% Somewhat less confident 23% 28% Much less confident 16% 9%


How open are you to buying a car completely online since the spread of COVID-19? Apr 2020 Jun 2020 Nov 2020

I wasn’t open to buying online before, and I’m not open now 39% 40% 40%I wasn’t open to buying online before, but now I am 29% 30% 26%I was open to buying online before, and I still am 23% 22% 27%I was open to buying online before, and my interest is even greater now 9% 7% 8%

Now open to buying online 61% 60% 60%

In your ideal purchase process, which of these steps would happen online instead of in-person? Select all that apply. Feb 2020* Apr 2020 Jun 2020 Nov 2020

Price negotiation 25% 65% 63% 61%Financing 36% 54% 55% 52%Trade-in valuation 34% 38% 42% 41%Purchase 19% 39% 37% 41%Test drive 9% 25% 18% 18%* February 2020 data from the CarGurus 2020 Buyer Insight study, n=3000

Which statement do you agree with most about the impact of the pandemic on shopping habits? I think shopping will get back to the way it was before sooner rather than later 12%I think shopping will get back to the way it was before, but it will take quite a while 44%I think shopping will never be exactly the same as before. Demand for online shopping, 43% contactless services, and new ways of buying will continue even after the pandemic

During this time, which of these would you expect from a dealership you would visit in order to purchase a vehicle, or get one serviced? Select all that apply.among current shoppers Jun 2020 Nov 2020

Employees wear facemasks 63% 67%Customers wear facemasks 52% 61%Wipe down surfaces regularly 73% 58%Adhere to social distancing guidelines 58% 53%Transparency about the steps they take to address cleanliness 60% 41%Allow shoppers to visit by appointment only 44% 36%Contactless drop-off and pick-up for vehicle service 53% 34%Do not accompany customers on test drives 32% 27%

Would you be interested in any of the following contactless shopping options, assuming they were available and free of charge? Select all that apply.among current shoppers

Dealership appointment 51%Test drive at home 38%Virtual/video tour of the vehicle 31%Home vehicle drop-off/delivery 25%Curbside vehicle pick-up (click & collect) 24%Solo test drive 23%Virtual/video appointments 21%Pay for (or finance) the vehicle remotely 21% At least one contactless service 84%

When normal activity resumes, do you expect to change how you use taxi or ride-sharing services (e.g. Uber, Lyft)?among those who used these services before the spread of COVID-19 Apr 2020 Jun 2020 Nov 2020

I expect to use them more 18% 28% 29%I expect to use them the same amount 43% 33% 37%I expect to use them less 28% 30% 25%I don’t expect to use them at all 11% 10% 9%

Decrease or stop using entirely 39% 39% 34%

When normal activity resumes, do you expect to change how you use public transportation?among those who used these services before the spread of COVID-19 Apr 2020 Jun 2020 Nov 2020

I expect to use it more 19% 25% 19%I expect to use it the same amount 36% 32% 36%I expect to use it less 33% 31% 32%I don’t expect to use it at all 12% 13% 12%

Decrease or stop using entirely 45% 44% 45%

Thinking of all the ways you use your car, which of these statements apply to you? During this time, I see my car as an escape or for fun 43%Going forward, I expect to use my car for more road trips or longer drives 47%

Thinking about the impact of the pandemic, which of these statements apply to you? In the long-term, I expect to work from home more than I used to 24% In the long-term, the pandemic will make me more careful with my money 43% In the long-term, the pandemic will make me more careful about taking on debt 34% During this time, I am spending more than usual 20%During this time, I am saving more than usual 32%During this time, I am spending less than usual on experiences 43%

cargurus covid-19 sentiment study: how the pandemic

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