The Virus and the Change in how Cars are Purchased in the U.S.

From the Detroit Free Press, May 29,2020

At some point, we've all felt like a chump in a car dealership showroom, waiting for the salesperson to emerge from a shrouded back office where they presumably spent the last 20 minutes pushing a hard-nosed manager to chip another hundred bucks off the price of that car you're haggling over.

After hours at the dealership, it feels like an endless game that you're destined to lose.

But that exhausting and enigmatic car-buying process at bricks-and-mortar stores will be a relic of the past in the aftermath of the coronavirus pandemic, industry experts predict. Mandated stay-home orders have forced car buyers and dealers to adopt a new 'bricks-and-clicks' model instead. "I can order my groceries to my door, I can order new running shoes to my door ... every part of our life right now is delivered," said Jessica Stafford, general manager of Autotrader and Kelley Blue Book. "Our studies have shown that in the COVID-19 world, I want to be able to have a virtual walk around the car and be able to talk to the dealer. You bring it to my house, it’s clean and I can test it. If I do buy it, you bring it back to my house for final delivery."

Many dealers already do some sales online, but few had offered home delivery prior to the pandemic. The emerging car buying model puts the buyer in the driver's seat with transparent pricing and more options. Those dealers who can't adapt to it will die, industry observers said.

In control

Jonathan Winingham, 34, of Cartersville, Virginia, likes being in control when he's buying a car. Winingham knew he wanted a 2020 Honda Pilot SUV to replace his 9-year-old Toyota Sienna minivan.

So in early May, Winingham, a firefighter and paramedic who works 72 hours a week, shopped online and found a Pilot in silvery blue. He closed the deal largely online and was prepared to drive nearly two hours to Carter Myers Automotive’s Valley Honda in Staunton, Virginia, to get his new car. But he didn't have to.

"They offered to deliver it and they showed up with gloves and masks on to my home and everything was sanitized," Winingham said. "They let me test drive it at my house and it was perfect. We signed the paperwork and that was it.

For Winingham, price is the determining factor in a purchase. He has used online shopping in the past to find the best deal, once saving $4,000 on a past purchase, then driving to a Kentucky dealership to take delivery.

But this experience, with home delivery, has convinced Winingham there's no other way to buy a car in the future.

"I can sit in my home," Winingham said. "I don’t have to go to a dealership and go through that eight-hour process and then wait to sign the paperwork."

Winingham secured a 60-month loan at 0.9% interest from Honda and he got a $500 discount as a first responder and $1,000 off on another promotion. Valley Honda accepted the most deals, he said.

“Because of the coronavirus, the deals are very good,” Winingham said. “I searched Honda’s website and I looked at different websites and what dealers priced it at. You have to do your homework. Just because there’s a deal out there doesn’t mean you have to rush out and make a purchase.”