As weird as this time of social distancing and pandemic is, it’s also likely the best time ever to buy a new or used car — if you have the fortitude and Internet connection needed to get it done. And after all this subsides, buying a car will not be the same as it was before.
It’s the sort of thing you may not even notice the first time you see it. It’s a commercial for Lincoln and its home pickup and delivery service amid the pandemic. It may also be a harbinger of change in how cars and trucks are sold in the United States. Here, watch it. Don’t get too distracted by the glass-wall, aspirational house porn.
“And for a little extra help,” the soothing, placid voiceover goes, “you can now purchase a new Lincoln remotely and defer payment for up to 120 days.” Yeah, we’re in a crisis and abnormal times don’t always set new norms when sanguine passivity returns to the culture. But for more than a century the sales model for new vehicles has been to lure the buyer onto the lot, get that person hooked on the sheer joyous romance of acquiring something new, and then crush every possible dollar out of them while signing paperwork in the F&I office. But now Lincoln is selling “remotely” and that leaves the customer free to choose that most dangerous option: Changing their mind.
And it’s not just Lincoln. Chevrolet, Hyundai, Mercedes, Mazda and likely more whose websites I haven’t yet surveyed are moving the sales and service operations onto the Internet — with cars being shuttled back and forth between the dealerships and customers’ homes. Going forward, this sort of convenience and potential lack of personal pressure may be a competitive advantage for any dealer looking for an edge. This crisis may well wind up what informs owners and buyers that the traditional way of doing business is not the best way of doing business.
Auto showrooms may not yet be this empty, but if sales move to the Internet permanently, they might be. (Photo: Getty Images)
This moment in time — besides being awkward, terrifying and tragic in about a million ways — is ripe with buying opportunity. Dealer showrooms are either empty or entirely shut down, inventories are thick even though new-vehicle production has virtually stopped, prices are dropping at the used-car auctions, and dealers still need to pay the interest on the loans to underwrite the inventory they hold. Moving metal at reduced or near-zilch profit is now in the dealers’ best interests. And interest rates — if your credit rating is stout — are often literally at zero percent.
Beyond all that, with the passage of the federal $2.2 trillion economic support bill, there’s going to be money in the pockets of many potential buyers. You can, after all, only buy so many rolls of toilet paper.
What it takes right now to take advantage of the situation is intestinal fortitude. While many are cowering, do you have the confidence in yourself and faith in the future to buy a new vehicle? Or, for that matter, a used one? Amid the current turmoil, is concentrating on a vehicle purchase a good idea?
Dealerships have been protected by franchise agreements and the laws that support them. Dealers have often the backbone of civic and local political institutions, and despite the rise of massive dealership groups like Penske and AutoNation, many still are. Dealers are smart and savvy operators in both business and politics, but change can only be resisted so long.
Though factories are shuttered, inventory of available new cars remains healthy. (Photo: Getty Images)
Already the Internet has changed how cars are sold around the world. Online research means customers know what dealers have into a new car and have a solid idea for what cars are selling. Virtually all vehicle purchases start online, even if they wind up in a small room at a dealership. The coronavirus pandemic seems to be accelerating that change even further.
Here’s a personal story. Back in 2001 my mother, who sells residential real estate here in California, had a very good year going into September. Then, of course, the atrocities of September 11th occurred and, like now, the economy grounded to a halt. My mom was already in the market for a new vehicle, and the price she got on a new BMW X5 that month was thousands less than what she had been quoted in August. My mom isn’t so cynical as to leverage a crisis to her advantage, but that doesn’t change the reality that she got a good deal.
Right now, awful as it is, is the time to get a good deal. And you likely won’t have to enter a dealership to get it.