The Surprising Connection Between Coronavirus, Automotive Retail, and Well-being.
Updated: Sep 3, 2020
By Marilou C. Vroman, CPA, CFE It seems we are all experiencing varying degrees of adversity stemming from the Coronavirus pandemic. From daily life changes becoming our “new norm”, to the barrage of bad news coming from all directions and the greatest challenge of having a friend, family member, or even your own fight and hopeful recovery from the Covid-19 illness itself.
While there is no shortage of negatives associated with this pandemic, I still try to find the positive side of every situation, no matter how small. Perhaps I am the eternal optimist. For example, if my car needs four new tires; I know the new tires will make the vehicle safer. When I had to cancel my long-awaited vacation; I found joy staying home with my dog and quality time with loved ones. The examples can go on and on. As we look for the silver lining of this Coronavirus cloud, there are some positive changes in automotive retail.
Prior to the coronavirus pandemic, our industry was evaluating impacts due to ride sharing, green initiatives, autonomous and public transportation. Enter Coronavirus, and surprisingly, the market for pre-owned vehicles begins to soar. In part due to new vehicle supply chain disruptions, but also because consumer preferences shifted, and more individuals have been seeking safer transportation options. The idea of sitting in a train, bus, Uber, or Lyft vehicle for any extended period has suddenly become a health concern. Now imagine the peace of mind from sitting in your own vehicle, breathing freely, socially distanced, and in much greater control of your personal space, safety, and health.
In addition, we are seeing a shift in the art of “conspicuous consumption,” In a time when travel, dining out, or visiting a theater or concert has become all but non-existent, the discretionary spending habits of many have changed. Are you now less likely to purchase a designer suit or fashion accessory when the item will spend most of its time sitting in your closet? Probably so.
While there are consumers who see vehicles as a utility or a commodity, many drivers find their personal vehicles to be an extension of themselves, a bit of their persona, a means of self-expression in a time when being behind a mask or behind closed doors is the norm. With the many lockdowns and restrictions in place, we still have the liberty to drive a vehicle almost anywhere, whether a nearby dog park, a grocery store, or an extended road-trip with the family for a vacation. As I get into my vehicle and remove my face covering for the duration of my drive to the office, my vehicle suddenly brings me a renewed sense of “normal,” in a time that certainly is not.
Furthermore, as financial resources have become restricted for so many, lenders have also developed programs to provide greater access to vehicle ownership for those in need with more flexible payment arrangements in their financing options. We have seen firsthand the positive impact these types of programs have had for clients with stronger sales performance in recent months.
As we consider the silver linings, it is a great time for dealers to engage with consumers and share the message that vehicle ownership is so much more than simply a means to get from A to B. Vehicle ownership provides a greater sense of control over one’s personal and family safety, it can help protect one’s health, and deliver recurring doses of “normal,” at a time we really could use it the most.