The Global Pandemic Has Had An Effect on Car Pricing

If there’s one thing that can be said for the global pandemic, it’s that it has had a huge effect on economies worldwide. While many businesses (especially small local businesses) have suffered greatly, many online based businesses have thrived. One business that has certainly seen their prices fluctuate is the auto industry. 

Unsurprisingly, when people are struggling financially, big purchases like cars, trucks and SUVs can suddenly become something which is put off to later. This might suggest an increase in used car or economy car sales over some of the mid-level or luxury options. When it comes to something with a major effect on the population, there’s always further dominos. Things like the price of gas dropping also have an effect on sales. In the end, it can feel confusing to determine exactly how the market has changed due to the pandemic. 

How Have Things Changed: Pandemic Pricing

In general, people have less disposable money and many people are struggling due to the effects of the pandemic. As an initial response, most automakers quickly lowered prices, or offered additional incentives as a way to appease potential buyers. Despite this, early sales in the spring of 2020 dropped up to 50%. In turn, more automakers have chosen to lower their prices or offer additional discounts. Since these dealerships still need to make as many sales as they can, they are willing to sell at a discount. It should be noted that sometimes, the vehicle you want might not be available. In most situations the issues with supply chains have been alleviated. However, there’s never a guarantee. 

However, there is certainly a downside to buying or leasing during the pandemic. For many people, money is fluctuating and more erratic than usual. Even though things have moved forward a lot, there’s always the chance of potential hours loss or job closures. If you are locked into a lease or have taken out a loan for a vehicle, it can be a bad time for employment situations to change quickly. 

One of the most interesting effects has been the change in prices on used cars. Because they are less expensive, their price has actually been seen going up. More people are in financial trouble, so they are selling their used cars. However, since more people are avoiding new cars due to financial restrictions, the demand for used cars has risen more than the prices.

Questions and Answers: 

It’s likely you have many questions about how the auto market changes. What follows are some simply questions and answers that can hopefully expand upon the article to let you get a better handle on vehicle prices through the pandemic. 

Q: Are dealerships open normally? 

A: After early shutdowns and closures, dealerships are selling. Many have worked on ways to allow people to view cars and order online to avoid contact as much as possible. 

Q: What kind of benefits are car companies offering? 

A: In many cases, discounts are being offered to front line workers as well as military personnel. There are also many good deals when it comes to interest rates. 

Q: What has been the effect on interest rates?

A: As hinted at above, interest rates have plummeted to help assist commerce. This in turn means that lease and financing agreements are also quite low. In many cases there are 0% interest options available to spur sales. 

Q: Is there assistance available if you already bought a car? 

A: In many cases, car companies are offering deferral plans for payments. They would rather keep getting payments eventually than get the used car back. Payment assistance plans differ based on the company.