The coronavirus pandemic has transformed the car industry for both workers and consumers, as social distancing and stay at home orders have impacted the way people navigate the roads. Consumers are leaving rideshare behind and opting to purchase used cars, creating a loss in new car sales.
The demand for ridesharing and public transportation has sharply decreased, as people are looking for reliable alternatives that allow social distancing. According to a survey by Ridester, more than half of the rideshare drivers who participated report an 80 percent loss of income since the start of this pandemic.
Rather than requesting rideshares, people are buying used cars to meet their transportation needs while maintaining social distancing to prevent the spread of COVID-19. This seems to be the temporary solution as society continues to live through this new normalcy.
A resident of New York city, Omayma Khayat, shares that she bought a used car when her previous used car of six years broke down this year. “I use the car for laundry, Costco and grocery shopping, driving to Jersey to visit my parents, and when /if school starts next week, I’d be dropping and picking my son up from school. Being in NY there is public transportation but I won’t [ride] them during the pandemic . . . [there’s] too much risk.”
According to the data provided by Edmunds.com, the sale of used cars is at an all time high, having jumped 16 percent just in July. Used cars are financially feasible for people who need the ease and freedom to navigate these pandemic times. A study by iSeeCars revealed that the price of used cars increased 4.1 percent in the month of August.
Used car dealers buy used cars from individuals and resell them at a higher price out of their lots. George Tucker, who also lives in New York City, shared that upon facing medical hardship this year, his family decided to sell their used car. He says that “the dealer saw it once and wanted it desperately . . . they basically paid me $2,500 over the book.” Tucker suggests that car dealers are desperate to fill their lots to make sales.
However, while used cars are economically more feasible to purchase and use, they present increased danger on the roadway. A study by The CarGurus found that 1 in 6 used cars have an accident history, which could put potential used car buyers in danger while out on the road. For this reason, it’s important that car buyers do their research on the vehicle and request the vehicle history before purchasing.
Car accident attorney Allen Patatanyan says,“Used cars present much higher risk of potential injury to its occupants or others involved in an accident because wear and tear associated with safety features, such as breaks, tires, suspension, frame, etc. This risk becomes even higher if the used car was previously involved in a major accident because regardless of the quality of the repair work after an accident, such used cars usually have compromised frames that subject its occupants to increased risk of injury.”
With the rise and return of the used car, new car sales took a plunge ,though are on the road to slow recovery. For the month of June, J.D power losses estimated for a 5.7 percent loss compared to what they had forecasted pre-pandemic and 11.3 percent compared to last year’s sales.
The future of the automotive industry is uncertain. Who knows just when rideshares and new car sales will make a comeback.