March new car sales to fall to lowest level this century?
- Credit: PA
Over a year ago the coronavirus pandemic was responsible for the first lockdown and many new car buyers were unable to complete their deals, resulting in what is traditionally the largest month of the year finishing over 40 per cent down on 2019.
Now in 2021 as we complete a three-month period of lockdown, March is likely to fall even further.
While the used business has also fallen, buyers and sellers have ventured to online or on telephone buying with 'click and collect' or home delivery and over two thirds of normal sales levels have been recorded whereas in the new car world the fall off has been much greater.
Why should this happen?
If you purchase online you have the ability to return the goods within a certain period, subject to conditions.
With used cars you are able to look at your potential purchase online with photographs, videos, previous history information including mileage and servicing.
As a result and the added opportunity to discuss this with your dealer, many customers are happy to purchase in this manner.
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Surely then buying a new car would be even more secure as it would be brand new from the manufacturer?
The difference occurs in the value of the product returned.
Most used cars will not have dropped in value in the seven or 14 days you have to return them. With new cars it is a different story so if the buyer were to complete the entire process online and have the opportunity to return the car, it’s value would have fallen significantly.
This is because it has become a used car and although the warranty would not be affected potential buyers would expect to pay less than for a new one.
Generally the sellers are not prepared to take this risk so the process is different.
There is also the question of new models and the desire to test drive and look at the product in more detail to satisfy yourself it is suitable for your needs.
Family viewing and inspection has also been impossible under lockdown rules and manufacturers have been flexible in allowing extensions to leases to cater for customers’ needs.
Will we then see a record April as we return to showrooms opening from April 12 with many appointments already booked and both buyers and sellers keen to conclude their overdue transaction?
Certainly this occurred last June and in the third quarter last year when the lockdown ended, so it is likely, and the industry is hoping to recover from a poor first quarter.
Fortunately, the aftersales part of many dealers has been very busy and with safety measures, in some cases up and beyond Government requirements, has allowed customers to keep their vehicles in first-class condition without concern for their wellbeing.
Easter weather was kind to us allowing many of us to meet with family outside, and as vaccinations continue at a pace and more tests are carried out on a regular basis confidence is starting to return.
Behaving responsibly will allow more sections of the economy to return and, step by step, life will improve for us all.
Stay safe and keep smiling. I look forward to next week.