buying Coronavirus and Car Buying: What You Need to Know
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The effects of the coronavirus pandemic continue to spread throughout the world, creating disruptions in the economy, sending the stock market into steep losses, shaking consumer confidence, and putting thousands out of work. With the growing turmoil, can you buy a car, and should you? If you need a car, what’s the safest way to buy one?
In this story, we’ll look at how the coronavirus and the COVID-19 illness it spawns are affecting the automotive market, and what you should do if you’re in the market for a car. There’s quite a lot we don’t currently know, and we’ll update this guide as more information becomes available.
U.S. Auto Sales See a Steep Decline amid Coronavirus Pandemic
Eagerly awaited first quarter sales reveal the extent to which COVID-19 is wreaking havoc on car buying in the U.S. Stay-at-home orders prompted by the spread of COVID-19 have brought economies to a screeching halt and first-quarter auto sales are the first indicators of how detrimental the disease has been on car buying.FCA has reported a quarterly decline in U.S. sales of 10.4 percent. Hyundai saw its March sales drop by 43 percent.This page will be updated as companies report sales numbers.U.S.
According to the U.S. Centers for Disease Control and Prevention (CDC), “It’s likely that at some point, widespread transmission of COVID-19 in the United States will occur.” On Friday, March 13, President Trump declared a state of emergency, unleashing federal resources to help deal with the crisis. State and local officials are ordering schools closed and implementing stringent restrictions to limit crowds and promote social distancing. By Thursday, March 19, U.S. cases exceeded 10,000, with 150 fatalities attributed to the disease.
Carmakers are rolling out programs to entice sales and support buyers who may have trouble making their car payments. With increasing calls for social distancing, dealers may face increasing restrictions about when and if they can keep their doors open. Events are unfolding at a rapid pace, as automakers announce plant closures to protect their employees and respond to slackening demand.
Coronavirus: a Chinese automaker cancels its presence at the Geneva Motor Show
© Romeo GACAD / AFP The new coronavirus has infected 82,560 people and left 2,813 dead worldwide, according to a report drawn up by AFP from official sources on Thursday . The Chinese automobile start-up Byton canceled its presence at the Geneva Motor Show on Thursday due to the epidemic of the new coronavirus while the organizers of this annual meeting assured that it would take place.
If you’re a car owner with a loan you’re unsure you can pay back, jump over to our story about. There, you’ll learn what you should do now and see special program automakers are making available to help their customers.
U.S. News & World Report has put together a guide to. The chance of contracting the disease is small, but the number of those currently affected is growing dramatically. Taking measures to prevent the spread can protect you, vulnerable family members, and others in the community.
Is Now a Good Time to Buy a Car?
No, the fear of the coronavirus should not stop you from buying a car – as long as you're looking for a vehicle that meets your needs and that you can afford. However, you don’t want to risk the health of you, your family, or others in the community to buy a car. You want to follow the advice of medical authorities about person-to-person interactions, hand washing, social distancing and other methods of preventing disease spread.
Coronavirus has dealerships moving to online sales — and car buying may never be the same
One dealer predicts most new car dealers will have by yearend the e-commerce capability to handle everything but test drives and final signatures.“This is going to fundamentally change how people view buying a car,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, and chairman of the National Auto Dealers Association.
Of course, as with a car purchase in normal times, you want to be smart aboutand .
The question may soon become “can you buy a car?” As states and cities adopt stricter policies to prevent the spread of the virus, dealerships may be forced to close their doors or limit their hours. Dealerships in many cities are closed due to shelter-in-place orders from local officials. By Thursday evening, a statewide shelter-in-place order had been given in California. Earlier in the day, Pennsylvania ordered all non-essential business closed. In some cases, dealers are allowed to keep their service operations going, but closing the sales side of the dealership.
Why Would Now Be a Good Time to Wait?
If you work in an industry that is susceptible to a coronavirus-induced downturn that could lead to layoffs or reduced hours, you should carefully consider whether it’s a good idea to lock yourself into a car loan or lease. The industries that will be affected by the pandemic are no longer limited to the travel and hospitality sectors. It will likely affect supply and demand in nearly every corner of the economy. Waiting for a month or two to see if things settle down might save you from getting into a loan, then missing payments or defaulting due to a job loss.
Now May Be the Right Time to Buy a Used Car
For those who want a used car and are in a position to buy, now could be a good time to pull the trigger, assuming precautions are taken to avoid exposure to the coronavirus. Wholesale used-car p rices have fallen more than 11 percent since last month and nearly 10 percent since this time last year, according to the Manheim Used Vehicle Value Index. For buyers, this means market conditions have effectively discounted used cars.There are several reasons for the slide, but they’re all connected to business closures forced by the coronavirus pandemic.
How Coronavirus is Impacting Car Deals
While some car deals are already being rolled out in response to reduced demand, it’s too early to predict whether savings on new and used cars will be widespread, or whether there will be shortages caused by plant closures. It will likely be a mixed bag, with excellent deals on some models and shortages of others. It won’t just depend on where the car is produced — it will also depend on the sources of all of its parts.
Though we won’t know about the virus’s direct effect on sales until they’re reported at the end of the month, there are anecdotal reports from across the country about declining showroom traffic.
In the increasing likelihood that the COVID-19 pandemic keeps customers out of showrooms, automakers and dealers will have to offer incentives and lower prices to entice buyers and lessees. Some, including General Motors, have already done so. Taking advantage of a car deal can save you thousands of dollars off the cost of the car or dramatically reduce the amount of interest you have to pay on your car loan.
Several automakers and lenders are currently rolling out special financing programs to encourage sales. General Motors, for example, is offering seven-year, zero percent loans and offering to defer the first payment for as long as 120 days. Hyundai, and its luxury arm Genesis, are bringing back their job-loss protection program, which will make as many as six payments for buyers who lose their job. Several automakers are offering financing programs with the first payment deferred for up to 90 days.
New Car Incentives Offered for Healthcare Workers During the Pandemic
New Car Incentives Offered for Healthcare Workers During the PandemicAutomakers and dealerships across the nation are offering healthcare workers special discounts on car purchases during the coronavirus pandemic.
The fundamentals of smart car buying remain the same. You want to cast a wide net by seeking prices from multiple dealerships,the car’s price, avoid , and take advantage of purchase and lease incentives offered by automakers. You can find the best low-interest financing and cash-back deals on our . Our shows offers from carmakers with low monthly payments and small amounts due at signing. If you’re in the market for a certified pre-owned car, our can show you the financing offers available.
Theconnects buyers and lease customers with local dealers offering prenegotiated pricing. Car buyers save an average of more than $3,000 when they use the program.
Coronavirus and Car Loan Interest Rates
The U.S. Federal Reserve has made unprecedented moves to reduce a key benchmark interest rate to near zero and support the economy. The strategies are intended to encourage lending and help the economy stabilize. The measures should lower the interest rate you pay on a car loan, though consumer interest rates are not tied directly to the rate the Fed reduced.
“The actions from the Fed ahead of its scheduled meeting on Wednesday reflect the view that a recession is a virtual inevitability,” says Curt Long, the chief economist at the National Association of Federally Insured Credit Unions. “As the Fed has stated previously, it believes it is better to meet such a scenario early and with force, rather than by gradually opening the faucets.”
Now May Be the Right Time to Buy a New Car
Times are tough for millions of Americans during the coronavirus pandemic, but for those with the financial wherewithal, it's a smart time to buy a new car. Low-interest and zero-percent financi ng deals abound, along with cash-back offers and attractive lease terms. To further entice consumers worried about job security amid a shaky economy and rising unemployment, many car manufacturers are pushing deferred payment plans that can delay the first payment on a new car for as many as two or three months.
Our Money team assembled a guide to.
The best way to get a low interest rate is by comparison-shopping at several lenders and getting preapproved for a car loan before you head to the dealership. Different lenders will lower their interest rates at different times, so it’s a good idea to take a broad look at the financing marketplace. It's never a good idea to start shopping at dealers without a preapproved loan in hand. They won't have any incentive to give you a good deal on financing if they don't have an offer to beat.
Will the Coronavirus Cause a Shortage of Cars to Buy or Lease?
It is increasingly likely that supply chain disruptions and plant closures will lead to a shortage of some vehicles sold in America. Those shortages will likely be offset by plunging demand, as consumers stay out of showrooms.
Early in the outbreak, factories and suppliers in Asia suffered disruptions. Automakers across Europe, including Fiat Chrysler Automobiles (FCA), Volkswagen, BMW, Ford, Renault, and others have announced plant closures in recent days. Plants in Japan and Korea have seen significant disruptions in components arriving from China. Korean automaker Hyundai previously shut down factories in Ulsan, Korea, in response to the virus.
Auto Plant Closures Across America
The U.S. auto industry is grinding to a halt. On Wednesday, Ford and General Motors announced plans to halt production at all North American plants through March 30. Late in the day, Fiat Chrysler Automobiles announced similar closures through the end of March. Honda announced a six-day closure of their plants in the U.S., Canada, and Mexico, with plans to reopen on March 31. Toyota declared a two-day shutdown of their North American manufacturing facilities, later extending the suspension of production to 10 days. Nissan’s U.S. plants will be shuttered from March 20 until April 6.
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In Indiana, Subaru will suspend manufacturing operations from March 23 to 29. Hyundai’s Alabama plant closed on March 18. A restart date has not been announced.
“GM and the UAW have always put the health and safety of the people entering GM plants first, and we have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM Chairman and CEO Mary Barra.
“UAW members, their families and our communities will benefit from today’s announcement with the certainty that we are doing all that we can to protect our health and safety during this pandemic," said United Auto Workers President Rory Gamble, via Twitter.
Appearing to defy an official health department order to shutter their Fremont, Calif. plant, Tesla continued normal production on Wednesday. Late Tuesday the Alameda County Sheriff’s official Twitter feed stated: “Tesla: @Tesla is not an essential business as defined in the Alameda County Health Order. Tesla can maintain minimum basic operations per the Alameda County Health Order.” Production of automobiles is not included in the county’s listing of basic business operations.
Buzzfeed News reported Wednesday afternoon that the electric vehicle manufacturer will reduce its workforce from 10,000 to 2,500. No time frame was given for the reduction in workforce. On Thursday, the automaker announced they will suspend manufacturing operations at their Fremont plant at the end of the day on Monday, March 23.
According to the Ann Arbor, Mich.-based Center for Automotive Research “Every week the industry is idle is costly. The Center for Automotive Research (CAR) estimates that just a one-week shutdown would result in an estimated annual loss of 94,400 total U.S. jobs, $7.3 billion in overall earnings and $2 billion in lower government tax receipts from personal income taxes, contributions for social insurance programs and current transfer payments.”
In the U.S. General Motors, Ford, and Tesla are looking at ways they could support the production of essential medical equipment, such as ventilators. In Europe, Fiat and Ferrari are working with a medical equipment manufacturer to explore ways of producing parts or assembling medical equipment.
According to a Reuters article on Wednesday, General Motors is looking at ways it could support the production of essential medical equipment, such as ventilators.
Supply Chain Issues
The automotive industry operates with a global supply chain. A car might be assembled in the U.S., but its parts are likely to come from around the world. Those regions include areas that are affected by high rates of COVID-19 cases. It only takes a shortage of one critical part to cause an assembly line to slow to a halt. The industry’s decades-long shift to “just-in-time” manufacturing means factories no longer stockpile components. Instead, many parts head to the assembly line the moment they arrive at the factory’s door. It is possible to shift global supply chains, though it takes significant amounts of time and money to do so.
Factories in the U.S. are not immune to disruptions in overseas parts manufacturing. According to a story in Automotive News, the Toledo, Ohio-builtuses steering gears manufactured at a facility in the region of China’s coronavirus outbreak.
Parts production in the Wuhan, China region is starting to recover from a near halt several weeks ago. However, the virus is spreading to more countries around the world that are contributors to automotive supply chains.
Should I Be Concerned About Buying Cars Made in China or Korea?
Currently, few cars are built in China for the U.S. market. The one relatively high volume model made there is the. Buick dealers have a deep supply of the two-row right now. They are currently offering generous incentives to help their pace of sales.
While Korean automakers Kia and Hyundai build a number of their cars in Korea, many of their models, including some of their most popular SUVs, are manufactured in America. Only time will tell if shortages of their Korean-built models occur. Theand are produced in Italy, one of the countries hardest hit by the virus.
Can the Coronavirus Survive the Trip from Asia on a New Car?
According to the CDC, the spread of respiratory droplets from affected people to others is thought to be the primary means of COVID-19 transmission. While they believe you can also get the virus from touching a surface that has been contaminated, it is not suspected of being the virus's primary means of transmission.
“In general, because of poor survivability of these coronaviruses on surfaces, there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures,” says the CDC.
Weeks or months pass between the time a car leaves its factory in Asia or Europe and when it arrives in an American dealership. It is extremely unlikely the disease would survive the journey, according to experts.
What Steps Should I Take to Protect Myself When Shopping for a Car?
There are many ways to protect yourself from the coronavirus when car shopping. Here are a few:
Do Your Research Online
With all of the resources available on the internet, there’s little that still has to be done in-person at the dealership or lender. You can comparison shop for financing and fill out loan applications online. In some cases, you can sign the loan documents electronically and have them transfer the funds directly to the dealership.
You can also do much of your car shopping online. A good place to start is with ourand reviews and and reviews. Our rankings are based on the consensus opinion of the top automotive journalists in the U.S., blended with quantifiable information about safety, predicted reliability, and several other factors. Our reviews are designed to answer the questions shoppers tell us are critical to their leasing and buying decisions.
Once you have an idea about the car you want, you can start contacting the internet sales department of dealerships. You can see their inventory online and negotiate the price of a vehicle by email or phone. If you agree on a deal, they can have the paperwork ready so you can minimize – or even eliminate – your time in the showroom.
In short, the more of the car-buying process that can happen outside of the dealership, the better.
Explore Home Delivery Options
One way to avoid going out into the community is to take advantage of a dealership’s home delivery option. Not all dealerships will deliver directly to your home, but it’s a good idea to ask if it’s possible. Though not all dealers participate, many Chevrolet, Buick, GMC, and Cadillac dealers will deliver cars to your home or office through GM’s “Shop. Click. Drive.” program.
Used car retailers CarMax and Carvana offer home delivery programs for preowned vehicles. You can complete all of the purchase and financing paperwork online, and the companies will deliver the vehicle to a place of your choice. Carvana is offering “contactless delivery,” where the representative will stay in the vehicle as you sign your paperwork.
In a growing number of regions, shelter-in-place orders are already in force or are being considered. In those locations, home delivery may be your only option.
Tesla has a announced a “touchless delivery” program, where customers can access their newly delivered vehicles using the Tesla app on their smartphones. They can then sign the paperwork left in the car, and drop the documents off before they leave.
Ask the Dealership What Precautions They Are Taking
It’s fair to ask dealerships what they are doing to protect their customers from the virus. If you’re not satisfied with their response, you can take your business to a dealer with a more acceptable answer.
An employee of a Toyota dealership in Kirkland, Wash. recently tested positive for the virus. The store closed for deep cleaning and disinfecting, according to Automotive News. Many dealers are reaching out directly to customers by email, describing the steps they are taking to clean their facilities and protect both customers and employees.
“The safety and security of our customers, team members and dealers is a top priority,” according to a Toyota spokesperson. “Our 1,500 Toyota and Lexus dealerships across the U.S. are taking extra steps to ensure the safety and security of our customers and their employees.”
Disinfect the Touch Points of Any Car You Test Drive
A thorough test drive of any car you’re considering is a critical part of any purchase. However, you don’t know how many people have had their hands on that door handle or steering wheel before you. It’s best to treat it like any other public space and insist that it is disinfected before you drive.
It’s important to wipe the car down yourself, as you don’t know how thorough dealership personnel may have been when preparing the vehicle. Be especially careful with keys and key fobs, ensuring they, too, have been disinfected. Before wiping any fabrics or other soft-touch surfaces, test the disinfectant in an inconspicuous place to make sure you won’t damage the material.
Different sellers may have different standards when it comes to the cleaning of used cars. If you’re looking at a private-party used car, you should assume that nothing has been done to disinfect the interior. While some dealers may disinfect the interior of a used car as part of their refurbishment process, many just clean the interior and shampoo the carpets. Before hopping in, you’ll want to ask any car seller, whether they’re a dealer or private party, what they have done to sterilize the interior. Be prepared to do it yourself, or insist on watching them do it.
Some retailers, including used car seller CarMax, are offering test drives with no salesperson in the car. If that’s not an option, consider putting off your purchase or driving with all of the windows down to get a constant flow of fresh air.
Wash Your Hands and Don’t Touch Your Face
Just as with any other public location, you should follow the CDC's COVID-19 prevention guidelines when visiting the dealer and following your test drive. That means washing or disinfecting your hands, avoiding touching your face, staying far away from people who are ill, employing social distancing, and covering your sneezes and coughs.
Don’t Shake on the Deal
It’s a normal part of a price negotiation to shake hands when you’ve reached a deal. Right now, you should probably avoid that tradition, or wash your hands as soon as you can if you do shake hands. In fact, it’s also a good idea to take your own pen to sign the sales documents.
Is It Safe to Take My Car to a Dealer or Independent Shop for Service?
As long as you follow some precautions, it is generally safer to take your car to an auto shop for service than it is to delay important maintenance or repairs. Of course, treat the facility as you would any other public space and follow the CDC's guidelines to help prevent the spread of the disease.
Auto shops have been allowed to stay open in California’s shelter-in-place counties. Officials consider them an essential service.
Before you leave the facility, wipe down the door handles, steering wheel, and other touch points with a sanitizing wipe.
Some consumers may be tempted to skip the repair shop altogether and do their own auto repairs. While most consumers can do basic maintenance, new cars are far more complicated than vehicles of the past. Any repairs that involve safety systems are best left to trained professionals.
The Coronavirus and Gas Prices
Gas prices are plummeting across the country. The drop comes from both a price war between Saudi Arabia and Russia and the fact that Americans are driving less. With many working from home and reducing travel, the demand for automotive fuel has greatly decreased. According to AAA, two-thirds of states saw double-digit price decreases last week.
Does that mean you should go out and buy a gas guzzler? Probably not. Fuel prices will likely bounce up once the coronavirus crisis ends and the summer driving season kicks off.
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