In order to build a sound business approach and strategy, given the current operational limitations posed by COVID-19, it’s crucial for automotive dealers to understand the present-day intentions of Canadian car buyers. As Canada’s leading digital automotive solutions provider, we commissioned the team at DIG Insights to survey 2,800 Canadians and focus in on those among them who intend to purchase a new or pre-owned vehicle in the next 6 months. The goal of the study was to discover the impact of COVID-19 on purchase intent and car shopping behaviour.
As we unravel the results of this research, we’ll compare it to previous consumer studies conducted by DIG Insights earlier this year and in 2019. This will be useful to shed some light on if and how consumer behaviour has changed as a result of the pandemic and to support the development of a plan to adapt accordingly.
The key finding from this study shows that 72% of consumers say that they will take more time than usual to finalize a vehicle purchase. More specifically, 86% of shoppers indicate that it could take them more than a month to make a purchase – compared to 54% of respondents who stated it took them longer than a month in the previous study. The most popular prediction was that it would take them about 2 or 3 months to purchase, with 30% of respondents selecting this timespan. When asked why they would not follow through with purchasing a vehicle at this time, the top three reasons were uncertainty about the COVID-19 situation worsening (60%), potentially losing their job (49%), or, falling ill (45%). Encouragingly, these are concerns which should be allayed when the COVID-19 pandemic is coming to an end, meaning no major damage has been done to underlying consumer confidence – yet.
Intent to purchase a vehicle among the general populace within the next 6 months has dropped off from 23% to 20% in the first week of tracking (March 23) and then to 18% last week (March 30), as compared to findings from our pre-COVID-19 study. While the intention to purchase a new vehicle has remained relatively stable for the past two weeks after dropping initially, consumers who planned to buy a pre-owned unit modestly decreased in each wave of tracking.
When asked why recent shoppers were looking to purchase a vehicle, they stated the top motivators were; their current vehicle is too old (24%), and, they were due for an upgrade (25%). Measured up to findings from our February 2020 study, the desire for something newer has actually increased. From other research we have conducted we can assign this to concerns about cleanliness and hygiene.
With online being the largest, or, in certain instances, the only source that some consumers will use during their car shopping journey across the subsequent weeks or months, we still see them primarily using the same platforms – manufacturer websites, online marketplaces and dealership websites.
However, a notable change between the most current study and research conducted in the past, is that consumers indicate far less intent to visit manufacturer websites, the percentage of respondents stating this intent dropping from 56% to 44%. Dealership websites suffered a similar fate, dropping from 48% to 36%.
Online marketplaces, such as AutoTrader.ca, gained a share of intent growing from 42% to 44%. This is most likely driven by the extension of the research phase which COVID-19 is causing, since most users begin their journey with marketplace and visit OEM and dealer websites later in their journey.
Checklist: Your Path to Success
- Retool your marketing and overall business strategy to focus on online shoppers, specifically online shopping behaviour.
- Heavy-up promotion of special financing rates, incentives, discounts, and/or payment deferral programs that align to current consumer needs.
- Train your front line sales staff to manage online leads or connections accordingly, and ensure they are prepared to engage with consumers using digital tools and technology.
- Ensure your website is up to date with your latest inventory and that all vehicle detail pages provide consumers with an opportunity to connect with a live sales agent.
- Be present on the marketplace and take this opportunity to make necessary adjustments to online merchandising, including headlines, photos, and vehicle descriptions.
- Leverage online tools to help you effectively engage with your customers. The Remote Selling Suite, a free toolkit by TRADER, connects you with your AutoTrader.ca marketplace shoppers.