The pandemic has a huge impact on almost every industry in the world, especially because many countries still have closed borders or limited transport of goods. Thousands of factories are still closed, which as a result, has caused many people to lost their jobs, and business owners to close their companies or put them on hold until the situation with the coronavirus is over.
The car industry is also suffering a lot from the pandemic and lockdown measures. The demand for new vehicles is significantly lower, along with the prices of used vehicles. There is less need for cars since most of the roads are closed, or you can drive only during a limited period over a day. If you want to learn more about what should car owners do during the lockdown concerning insurance, registration, and other important things, you should visit number1plates.com.
Furthermore, it is still not clear what will the final results and effects of coronavirus pandemic be on the car industry, but it will surely change the market, sales, and prices of cars as well. Here are some of the ways how the coronavirus will impact car prices.
1. Fear of the Recession
According to many financial experts, it is likely that the whole world is going to get into another recession, like the one in 2009. Also, some countries introduced various measures into their economies to get over the financial crisis with less effort. For example, in the United States, every citizen got a check, and companies also got some funds from the government to avoid leaving many people without jobs, and remain cost-effective.
However, having the fear that there will be another economic crisis, most of the people are not considering buying a vehicle, not even a used one. On the other hand, even those who are interested in replacing their cars, they are choosing something more reliable. Moreover, car dealers are aware of the situation. Therefore, we can see some amazing offers today, with huge discounts. In that matter, if you are planning to buy a new vehicle, now is maybe the best time for that.
2. Increased Demand for Loaning the Vehicles
Since most of us only need vehicles sometimes these days, since people are working from home, and you need it only for groceries or some shorter destinations, the demand for loaning the vehicles is much bigger. On the other hand, when it comes to getting loans to buy a vehicle, dealers would most likely offer you a good deal for a new car, but if you are looking for a loan for a used vehicle, it is unlikely that any dealer would be interested in such an offer these days. The reason for that the prices of all vehicles went down significantly and the companies would be much more interested to sell you a new vehicle through a loan contract, rather than a used car.
3. Showrooms are Closed and Sales Went Down
We can see that in some countries the registration of new vehicles is around 50% lower than in the same period last year. That leads to the conclusion that the sales are halved. Also, there are no showrooms currently, where people could take a closer look at new models of cars, and most car shops are closed as well. Moreover, there are some ways to buy a new car in a state where the lockdown measures are still active, but only through some online platforms, but most people won’t buy a vehicle this way.
4. The Advertising of Car Companies is Still Very Active
The car industry is struggling, and they are putting all of their efforts to motivate people to buy vehicles. They are spending the same amount of money on commercials as in the same period last year, and some of them even more. The main reason for that might be the fact that almost 90% of factories are currently closed, and companies are trying to sell what was left in the line, and become able to remain cost-effective as much as they can. Nonetheless, despite the possible financial crisis, if you have some extra money, or you are capable of getting a loan, now is the right time to invest in a new vehicle, because they will hardly be the same discounts and great offers like today.
5. The Car Industry Will Recover Fast
Even though the production and sales are down this year, most of the experts are confident that the industry will recover from the crisis very fast when the lines become active again. The main reason is that most of the people need vehicles. However, there might be some changes in the market for cars, and the industry will have to adapt to the different needs of customers after the pandemic ends.
The Bottom Line
The main problem with the car industry is that there is a huge drop in sales, and dealers are forced to introduce various offers that would motivate people more. However, that leads to the conclusion that now maybe it is the best period to buy a car if you have a stable financial situation. While most of the product lines are on hold, the companies will try to sell what is left, and that is the way we can see some amazing offers. On the other side, when the situation is under control again, prices will probably become less affordable.
Another important fact related to choosing a vehicle at this moment is that you should choose some more economic models instead of some luxurious vehicles and ones that spend a lot of fuel or have a high cost of maintenance. This way, paying for a loan every month will not be such an issue even if there is a recession, because you will spend less money on possible failures of the car, and the fuel. The average drop in prices of most vehicles is around 10 percent, which can be a great deal along with the 0% interest if you are interested in leasing.