How Did The Car Finance Industry Adapt During COVID-19?
Today you cannot go far without hearing the words COVID-19, pandemic or hand gel. A disease unseen before, the virus has not only infected millions around the globe, but it’s effects have crept into our economy too.
The car financing industry has been hit hard. Lenders doors have remained shut, and others have taken a leap of faith in the face of such an unprecedented situation. To survive these days in such a fluctuating financial world, changes have had to be made.
So with that in mind, let’s take a look at how the car finance industry has adapted during COVID-19:
When the lockdowns came
Enforced business closures, some permanent, some temporary saw a significant impact on the stock market with immediate effect. Sales were plummeting across the world, and with consumers battling financial and severe health concerns, the automotive industry suddenly looked like a bleak place to be.
No-one could travel, commute or even drive to their favourite beauty spot down the road. Now in the midst of Lockdown 3.0 in the UK, roads remain relatively empty. With our working behaviours and patterns at a standstill, consumers avoiding public transportation and work from home. Car buying has ground to a halt.
The car finance industry is dependent on predictability. Everything from how we spend our income all down to our reliability all come into account. With many people facing unemployment or cut wages supplemented with the furlough scheme in the UK, the demand for loans is at an all-time low.
Adaptation for preservation
Weathering the COVID-19 storm is no simple endeavour. When your industry is built on reliable repayments and predictable circumstances, you either adapt or you throw in the towel.
Born out of innovative ideas and keeping up to date with fast-changing regulations have allowed some car financing businesses such as Carvine to thrive in the face of adversity.
In an essential move, more stringent criteria are now attached to most loans and credit deals available. With COVID-19 bringing the whole world to its knees, the car finance industry has achieved what it always does best: take the individual’s circumstances into account. As you can imagine, it’s never been more complicated with each unique case setting its own challenges.
Undoubtedly, the customer’s spending behaviour has changed, and the industry could not merely sink or swim. Instead, to survive, the forward-thinkers have raised their A-Game to build for the future.
Virtual dealerships rise to the challenge
When your customers can no longer come through your doors, but the buyer-seller relationship needs to remain, what can you do? Well, you spring into action and adapt with the times.
The buying experience is at the centre of what you expect from a dealership. Everything from sales-related banter down to the test drive is what makes the showroom floor so important. In response to the multiple lockdowns, tier systems and general fear, dealerships have had to embrace a multi-pronged business strategy to survive.
Everything virtual and online has become commonplace throughout the pandemic. From work meetings on Zoom to having Joe Wicks in your living room, people the world over have had to change their day to day habits drastically. So has the dealership. Virtual showroom tours, personal online customer meetings and seeing your dream car (as close as you can!) are all part of the new dealership experience.
Beyond the virus
Many lessons have been learned throughout COVID-19 – from how quickly an unknown virus can spread to how to innovate industry for the future. With the economy continually in flux, the car finance industry is undeniably waiting for interest rates to start building. Beyond the virus, the world will go on, and with it so will the industry.
Supplementing loans and credit with well-thought-out, business preserving criteria will be the industry’s saving grace. With that in mind, customer satisfaction still needs to remain the central focus of any sale and finance agreement. Like anything on the consumer market, poor service and communication will score you a bad rep in the industry’s eyes.
As we all prepare to take our first steps back into the post-COVID world, many things will need to stay in place for the future. With high pressure to upgrade to electric vehicles in the coming years, there is already an imminent deadline for those living in some of the UK’s biggest cities to change their car. It’s safe to say that the digital showroom will be a permanent feature, with less emphasis on face to face sales on the showroom floor.
The future is looking bright for the car finance industry. As the post-COVID world rebuilds, so will the financing business. Let’s face it; the driving experience is one most of us are not willing to let go of!