In 2019, there were 17 million cars and light trucks sold in the United States. This year was shaping up to see the same volume. That is until the COVID-19 pandemic took hold of the country. With businesses closed and a record-breaking unemployment rate that is still climbing, car dealers like Ford are struggling to move their inventory.
First-quarter sales for 2020 revealed a 12.7 percent decline, with a 37.9 percent decrease in March alone. These numbers indicate that car and light truck sales for the coming year could bottom out at 13 million units. Car dealerships are trying to come up with innovative ways to make a sale, while major auto manufacturers and local dealers are now offering lucrative incentives.
A tough time to purchase a vehicle
Despite the hardships the pandemic has placed on American families, some people find themselves unable to wait to purchase a new vehicle. Banks are willing to lend money, and gas prices are at an all-time low, but the car-buying process has become complicated.
Many dealerships throughout the country have been forced to close or limit daily business to adhere to social distancing regulations. Service departments have been able to stay open since they are deemed essential, but showroom doors have been locked tight. Restrictions have been placed on the sales department, making it difficult to maneuver the process of purchasing a new vehicle.
Test drives have become limited, and documentation must now be done entirely online. Comparison shopping is no longer an in-person option, and at-home delivery of a new vehicle is becoming the norm. While it sounds appealing to miss out on the frustration of dealing with sales and finance managers in the traditional car-buying process, it is more difficult to navigate the hurdles from the confines of your home.
How COVID-19 is affecting Ford and other manufacturers
Almost every automobile manufacturer in the United States has experienced a sharp decrease in sales due to the COVID-19 outbreak. Road Show reports that 93 percent of all U.S. auto production has been suspended indefinitely. What started as four manufacturing plants being shut down when the novel coronavirus was first detected has now grown to 25 plants being closed as of March 26, 2020.
Ford, General Motors, Fiat Chrysler, Honda, Toyota, and Volkswagen have all shut down their operations in the United States. With assembly lines coming to a screeching halt, car manufacturers are finding ways to help the medical community. Michigan-based Ford is using airbag material to make an estimated 1.3 million PPE hospital-grade isolation gowns by July of this year. Tesla, GM, and Ford are using their production facilities to produce critical medical supplies such as ventilators, face shields, and respirators. What they aren’t making at this time is automobiles.
A Ford dealer is offering to pay your mortgage
In these unprecedented times, Koons Silver Spring Ford in Maryland is presenting its customers with a hard offer to turn down. In an effort to entice those in the market for a new car, the dealership is offering a very unique proposition. They are paying the housing payments of anyone that purchases a vehicle from them. They’ll cover up to $1,500 for two months for any mortgage, lease, or rental payment owed by the customer.
In addition, Ford Credit is allowing a 90-day deferment of the first payment on the purchase of an eligible Ford vehicle. Other major manufacturers are also offering enticing incentives that include interest-free zero percent financing, extended terms up to 84 months, and deferred payments for as long as four months. Companies such as Hyundai are offering an extended warranty at no additional charge. There is no indication of how long these offers will last, but if someone is in a position to buy a new car, now is definitely a good time to get an incredible deal.