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Coronavirus impact on auto industry could benefit buyers as Florida rebounds

Dealerships offering slew of deals to entice buyers
Coronavirus impact on auto industry could benefit buyers as Florida rebounds
Posted at 10:22 AM, May 06, 2020
and last updated 2020-05-06 12:03:50-04

Auto sales in Florida and the nation plummeted in the last few months as COVID-19 restrictions hurt another part of the economy. While the drop will further weaken state revenue, the industry's rebound may benefit buyers.

Brenda Nova is one of the first few trying to capitalize on what looks like a great time to purchase a vehicle. The mid-March coronavirus protections dropped sales to 2008-09 auto crisis levels and the Tallahassee resident is hoping prices fell with them.

"That's what we're here for," Nova said. "Looking for a good price on a good car."

As people spent less and saved more, the Florida Automobile Dealers Association estimates business dropped up to 50% across the state's more than 800 dealerships last month. Many staying afloat, it says, with lease terminations and collision replacements.

"Scary for my dealers, very scary for Florida's economy," said Ted Smith, who heads the association.

Fewer sales, Smith said, means less revenue for Florida. Auto purchases are about $4 billion or 14% of the state's annual sales tax dollars. Those funds make up the bulk of the state's revenue.

"I think that we're going to be OK if Floridians realize the economy is improving -- people are able to go back to work," said Smith. "It's all about consumer confidence."

To boost that confidence, the industry is driving in a new direction -- online sales. Many dealerships are now offering ways for consumers to buy a vehicle and deliver it without leaving their homes.

"That's a huge piece of our business and has been," said Chuck Urban, who heads Tallahassee Dodge-Chrysler-Jeep-Ram. "It's just been growing and growing."

Urban said last year 10% of his sales were completed through online delivery. He's expecting COVID-19 will spike that number higher.

"I think people are more comfortable with it," Urban said. "They were kind of forced into using it, so I think it's going to be an easy transition to do a lot more business that way."

Dealerships also offering a slew of deals to entice buyers back -- employee pricing, delayed payments and more.

The auto buying experts at Edmunds say customers can expect many more opportunities for 0% financing. In April, a fourth of all sales offered it compared to just 5% in March. Average interest rates have dropped too, down 25% for new vehicles from March to April.

To recap, here are the key takeaways for consumers:

  • Auto sales slumped over the last two months.
  • It'll likely impact Florida's budget.
  • Consumers will benefit with ease of online sales and major deals.
  • Some of the best are employee pricing, delayed payments and reduced interest rates.