Rising demand for used vehicles

With a product range that is priced well below new vehicle prices, used vehicle sales are gaining momentum in the United States, accounting for almost 33 percent of dollar sales at franchised dealerships in 2020. The average American household spends some 4,500 U.S. dollars on vehicle purchases annually and used vehicle financing options are naturally more affordable than new vehicle financing options. While prices for used cars remain more affordable than new ones, the global chip shortage resulting from the COVID-19 pandemic has depleted used vehicle stocks. The average list price of used vehicles in the U.S. reached over 24,400 U.S dollars in June 2021, just under 4,800 dollars more than prices in June 2020. Supplies for the Toyota RAV4, best-selling sport utility vehicle in the first half of 2021, were projected to last under 18 days in as of June 2021, all sales remaining constant.

Customers begin to embrace online sales

Digitization of the car buying process is on the rise. Previously apprehensive customers seem to see fewer reasons not to purchase a vehicle online amid the coronavirus pandemic. Online car sales emerged as an opportunity for car intenders who were not comfortable purchasing a vehicle from a physical dealership within the first month after restrictions were lifted. Consumers widely preferred online car retail to find information on buying incentives and financing qualifications, but other activities such as acquiring the vehicle and test driving it have not fully made the leap to a home-delivery solution. As for franchise car dealers, the cost of digital retail is the main operational barriers to online car sales, though less than 35 percent of the franchise dealers surveyed identified it as a hurdle.

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