Online retail sales spiked in Australia during 2020 as people across the country endured some kind of coronavirus restrictions.
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.
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.
“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.”
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.
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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.
Tsouvalas said this reflects how cars are such a big part of people’s lives.
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“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.”