With ridership down for public transportation, vehicle rentals, and ride-sharing apps amid safety concerns during the pandemic, Canadians who never saw the need to own a car before appear to be changing their minds and boosting sales.
According to a recent survey from Autotrader, first-time car buyers in Canada are three times more likely than experienced buyers to state they’re purchasing a vehicle because of the COVID-19 pandemic, with one in 10 respondents saying their decision to buy was a direct result of the pandemic.
The survey asked 600 users of the online automotive marketplace in late August about their vehicle shopping habits during the pandemic and looked at responses from both experienced and first-time buyers.
Ian MacDonald, the chief marketing officer for Autotrader, said there are several factors related to the health crisis that have pulled younger, first-time buyers into the market when they were previously resistant to car ownership.
“We have noticed that there’s more first-time buyers coming out to the site,” he told CTVNews.ca during a telephone interview on Tuesday.
MacDonald said their survey data shows that Canadians’ attitudes towards other modes of transportation, such as public transit, vehicle rentals, and ride-sharing apps, has changed during the pandemic.
An earlier Autotrader survey of 1,000 shoppers conducted back in April found that 62 per cent of respondents who previously used public transit on a regular basis said they now view owning a vehicle as a more desirable option, with 40 per cent of them going as far to say they didn’t plan to use public transit again after the pandemic.
For those who used ride-sharing apps, such as Uber and Lyft, before the outbreak, the survey found that a whopping 70 per cent of respondents did not plan on using them again after the pandemic.
The automotive marketplace CarGurus also found similar statistics in a survey of 500 Canadian shoppers conducted in early June. According to their results, 41 per cent of respondents who previously used ride-sharing apps and 50 per cent of those who used public transit said they expected to decrease or eliminate their use of them entirely.
Oumar Dicko, the chief economist with the Canadian Automobile Dealers Association, said sales were down by 75 per cent in April, but they made a significant comeback in May and June thanks, in part, to a new, younger customer base at dealerships.
“The new demand is what I call generated by the pandemic fear where people who didn’t necessarily need a vehicle or wouldn’t necessarily purchase a vehicle started to purchase vehicles,” he told CTV News for the streaming app Quibi in July.
Irina Grozavescu counts herself as one such buyer who admits she bought a car for the first time during the pandemic because she felt like it was safer than renting cars and other forms of transportation.
“Before I used to take Ubers and Lyfts all the time, just even running errands like groceries if we’re doing a big trip, but that just doesn’t seem as ideal these days,” she told CTV News for the streaming app Quibi in July.
“It is creating my own bubble and it makes it a lot easier.”
In addition to concerns about contracting coronavirus using public modes of transportation, car shoppers have also discovered new reasons for wanting a vehicle of their own.
According to CarGurus’ survey, respondents were most interested in purchasing a vehicle for recreational purposes, such as weekend getaways.
The survey found that 50 per cent of buyers said they expect to use their vehicle for more road trips or longer drives in the future, with another 45 per cent replying that they view their car as an escape or for fun.
“In the long term, it’s becoming clear that vehicles are more vital for recreation,” Madison Gross, the director of customer insights for CarGurus, told CTVNews.ca in August.
The August survey for Autotrader also found that respondents listed owning a car for recreational purposes as a top reason for purchasing during the pandemic.
Of consumers who were buying a vehicle as a result of COVID-19, 34 per cent said having use of a vehicle for local recreational travel and road trips was their top reason for it.
“I think that’s been driven by staycations, people staying more local, staying at home, no one’s going to be flying for awhile, that kind of thing,” MacDonald said.
Warren Barnard, the executive director of the Used Car Dealers Association of Ontario, said he’s heard from members that the demand for used vehicles has increased, particularly in urban areas, during the pandemic as people’s perceptions about vehicle ownership have changed.
“I think a lot of people have rethought the idea of ‘Hey, we do need a vehicle to get from point A to point B within the city, or to take a vacation, or mini holiday, or a long weekend,” he told CTVNews.ca during a telephone interview in August.
While he doesn’t have specific data on it, Barnard said the increased demand for second-hand vehicles is usually a good indication there are more first-time buyers in the market since they tend to buy used over new.
He also said that numbers out of the U.S. have shown that fewer buyers are trading in used cars in comparison to other years.
Barnard said he suspects a similar trend is happening here in Canada and that it’s another sign of more first-time buyers in the market.
“If you’re not trading in a car, there’s a pretty good chance that you’re a first-time buyer,” he explained.
Despite poor sales in the spring, the auto industry in Canada appears to be on an upward trajectory with 165,020 autos sold in July, a 6.2 per cent increase from June, according to DesRosiers Automotive Consultants Inc.
And while they’re still down from the same month the year before, Barnard said he’s confident sales for both new and used vehicles will return to pre-pandemic levels in the months to come.
“I’m optimistic that we will be able to close out the year on a good note,” he said.
MacDonald, too, appears to be heartened by the increased interest in car ownership, adding that Autotrader has seen consecutive record-breaking traffic every month since May.
“The proof is definitely in the pudding that the demand for cars is rising significantly in the last few months,” he said.
With files from The Canadian Press