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Covid lockdowns fail to boost online car sales

By David Bonnici, 11 Dec 2020 Car News

buying a car online

A new survey shows that Australia's car industry failed to benefit from online shopping boom caused by coronavirus lockdowns

Need to Know:

  • Just 30 percent of Aussies would be comfortable buying a car online

  • Work from home has failed to sway consumer sentiment

  • Only 3.9 percent of those surveyed reckoned they would not need a car if they kept working from home

  • Car loan deferrals are on the rise

Online retail sales spiked in Australia during 2020 as people across the country endured some kind of coronavirus restrictions.

However, while Aussies were ordering food and buying shoes and jigsaw puzzles over the internet in record numbers, Covid-19 failed to have an impact on online vehicle sales.

Surveys carried out over the past few years have shown that about a third of Australians were ready to buy a car from a virtual showroom sight unseen.

The most recent poll, by online car financial brokers Savvy, suggests even being locked down hasn’t changed vehicle buying habits.

Furthermore, it will take some time to convince the remaining 70 percent.

buying car online

According to the survey of 1001 Australians, more than two-thirds said they were 'uncomfortable' about home-facilitated test drives, virtual demonstrations, remote payments, and dealer delivery, with more than half of them saying they were ‘extremely uncomfortable' with purchasing online.

Only four percent of all survey recipients said they were 'extremely comfortable’ with buying a car over the internet.

MORE: The future of online car retail

“It seems we’re not quite there yet when it comes to buying big assets like cars online,” said Savvy's managing director Bill Tsouvalas. “We don’t want to buy a car sight unseen, but we are still in the market for cars and vehicles in general.”

Tsouvalas says that overwhelming hesitancy to purchase a car online has contributed to Covid-19 having a bigger impact on vehicle sales in 2020 than it needed to. 

“Work From Home doesn’t seem to have made much of a dent in consumer sentiment – but the fact many aren’t prepared to take a leap of electronic faith has.”

buying a car from home

The survey also showed the reasons why people held off purchasing a new car this year.

Not surprisingly, 20.7 percent of respondents said they were concerned about personal finances. Interestingly, that was one of the few reasons that could be attributed to Covid-19, with 9.6 percent saying they were still comfortable using public transport or alternative transport, and nine percent admitting they were waiting for better bargains.

Read next: Would you buy your next car online?

Just over 53 percent said they’re holding off as they say it’s too early to upgrade.

And with up to 4.3 million Aussies working from home at some point and not requiring a car to drive to work, just 3.9 percent of respondents said not having to commute was the reason they were holding off on buying a new vehicle.

onlibne car buying app

Tsouvalas said this reflects how cars are such a big part of people’s lives.

Read next: Should you buy a car online?

“Aussies see car ownership as fundamental, not just as a means from getting to and from work,” he said. “It’s for getting around, taking holidays, getting the kids to their activities, and just to have that sense of freedom.”

Car loan deferrals on the rise

The Savvy Finance survey also revealed that 25.5 percent of people with an active car loan requested a payment deferral during the pandemic.

And 20 percent of people on JobKeeper payments also directed some funds to cover their car loan repayments.

“One in four people have gained a deferral, which means lenders and brokers are trying hard to reach equitable arrangements with people undergoing hardship due to the pandemic,” Tsouvalas said.

“However, the industry must have a plan in place for vulnerable consumers when JobSeeker and JobKeeper end, if a robust recovery isn’t forthcoming.”