COVID-19 has caused a massive shock to the U.S. and global economy, affecting the automotive industry. Initially, supply shortages posed a major threat to the automotive market since overseas factories producing parts and equipment were shutting down. Then when the virus hit the U.S., car dealership activities and consumer demand hit an all-time low.
Last April, the automotive industry witnessed new and used car sales go down by 51 and 54 percent respectively.
But as the economy gradually reopened during the summer months, car sales began moving toward pre-COVID levels, particularly used car sales, which were only down 4 percent from July 2019. A major contribution to the rebound was the decrease in public transportation and ridesharing services. Since many essential workers viewed these modes of transportations as more of a health risk for contracting the virus, personal vehicles became viewed as a safer option, hence the increase in car sales. Federal stimulus checks, generous unemployment benefits, and lower gas prices and car loan interest rates also were significant contributors to the rebound.
What’s next for car dealerships?
With the rise in unemployment rates due to the COVID-19 pandemic, many car dealerships are seeking ways to meet consumers where they are. Enrolling in the Credit Acceptance program allows dealers to approve car buyers with bad credit, no credit, fixed income, unemployment or are self-employed.
If your car dealership is looking to reach more customers in your market, fill out the form on our website to learn the benefits of becoming an enrolled dealer in our auto finance program!
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