Car shoppers’ general outlook on the economy was worse in the summer of 2020 than it is at the end of 2020, despite significantly higher COVID case numbers across the U.S. in December.
Concerns about the overall economy peaked in July, with 67 percent of car shoppers saying they were more anxious about it than they were a year ago; that number dropped to 62 percent in December.
The pandemic’s influence on economic outlook peaked in August when 64 percent of consumers said COVID was having a negative impact; that level of pessimism wasn’t seen again in November or December.
In April, 38 percent of shoppers said COVID was impacting their vehicle purchase decision; that number declined through November and rose only slightly in December.
While COVID was a deterrent in consumers getting a new or used vehicle at the onset of the pandemic, its impact on a vehicle purchase eroded as the year wore on.
Autolist’s survey gathered responses from more than 13,000 car shoppers between March and December 2020.
In 2020, as COVID cases in the U.S. surged in the summer and then tailed off in the early fall, car shoppers’ anxiety about the economy followed a similar curve. But as new cases began to reach unprecedented and alarming levels in November and December, economic pessimism this time was more muted.
That’s according to the year-in-review Consumer Sentiment Survey by Autolist.com. It polled more than 13,000 car shoppers from March through December of 2020 and looked at the key drivers of economic anxiety throughout the year, including the impact of the presidential election and the ongoing COVID pandemic.
“As 2020 finally comes to an end, and the COVID vaccine begins to roll out, consumers are feeling better about the economy than they did this summer,” said Corey Lydstone, president & founder at Autolist.com. “This is happening even as the numbers of COVID cases and deaths set new records every day.”
Autolist launched this Consumer Sentiment poll in March 2020 -- the early days of the COVID pandemic in the U.S.; it’s been gathering responses from used and new vehicle shoppers ever since.
“By running this survey throughout this year, we’ve been able to track the rise and fall of consumer confidence among car shoppers and match that to critical moments for both the coronavirus pandemic and the presidential election,” Lydstone said.
Primary Questions and Results:
The key questions respondents were asked focused on whether they were more anxious about the economy now than they were a year ago and what impact the coronavirus was having on their economic outlook.
Negative responses to both questions initially shot up in April, then stayed level until peaking in July and August, tailed off for a few months in the fall, and then climbed more slowly in November and December.
Here’s a detailed look at how responses to both questions played out throughout 2020.
Are you more anxious today about where the economy is headed than you were a year ago?
As you can see from this chart, economic anxiety reached its highest level in July, when 67 percent of respondents said they were more anxious about the economy than they were a year ago. That coincides with a summer peak of COVID cases across the U.S. that occurred in late July (the 24th, according to the CDC).
The percentage of people feeling more anxious then declined for the following three months -- a period in which COVID cases nationwide dipped -- before anxiety began rising again in November and December.
What’s noteworthy about the levels of anxiety in the final months of the year is that they didn’t reach summer levels, despite the fact that the COVID pandemic had become far worse.
“What we found interesting about this slower climb of anxiety in recent winter months was that it was against the backdrop of COVID cases and deaths shattering records on a daily basis,” Lydstone said. “Consumer outlook is clearly buoyed by news of a vaccine despite the fact that it could be many months before inoculation is widespread.”
That improved outlook at the end of 2020 was echoed in the percentage of consumers who said COVID was negatively affecting their outlook on the economy.
Does the coronavirus have any effect on your outlook on the economy?
This chart shows the percentage of respondents each month who said that COVID was having a negative effect on their outlook on the economy. This impact topped out in August - shortly after the virus hit its July 24 record - with 64 percent of consumers in August saying COVID was negatively affecting their outlook on the economy.
As with anxiety about the economy, the pandemic’s impact then remained lower for the next few months of the fall before rising again toward the end of the year.
Also similar to economic anxiety, the resurgence of COVID-inspired negativity by consumers was more muted in November and December than it had been in the summer, even as virus cases surged. This again points to the likely impact of a long-awaited COVID vaccine.
Impact on Car Shopping Itself:
Fortunately for the auto industry, car shoppers and demand for vehicles have remained resilient in the face of this global pandemic.
Autolist asked respondents whether the COVID crisis was impacting their decision to get a new or used vehicle. The number of people who said it was impacting their decision peaked in the early days of the outbreak, with 38 percent of shoppers in April saying as much.
“Though there has never been a good month for this COVID pandemic, April was a much different time in terms of what we didn’t know about the virus or its impact on our daily lives,” Lydstone said. “This uncertainty clearly led people to rethink their car purchases initially.”
That reluctance has been eroding ever since, Autolist’s survey found, and it’s been defying significant correlation with COVID cases throughout the year.
In July and August, as cases hit their summer high, 34 percent of consumers told Autolist that the coronavirus was affecting their purchase decision. After the summer surge let up, COVID’s impact on a new vehicle purchase continued to dwindle, hitting a low of 28 percent in October and November.
Only in December did the number of consumers saying the pandemic is affecting their purchase decision tick up -- rising to 31 percent. While that’s the first time this metric went up since the initial April jump, it’s still below even the summer numbers, indicating the cautious optimism of consumers, despite the current COVID case count.
Of course, no discussion of 2020 would be complete without a look at the presidential election between the incumbent Donald Trump on the Republican side and his Democratic challenger, Joe Biden.
To this end, Autolist’s survey also asked whether respondents expected the economy to fare better under the current Trump administration in a second term or fair better under a new Biden administration.
As the graph indicates, President Trump started out strong in the first two months of Autolist’s survey; this is consistent with the widespread belief by political analysts that a strong economy was crucial to his reelection chances. In April, 31 percent of respondents said they expected the economy would do better under Trump; 28 percent said it would do better under Biden.
By May, however, as the severity of the pandemic had become clear, Biden had pulled even with Trump, with 30 percent of car shoppers choosing Biden and another 30 percent choosing the president.
June marked a clear turning point for Biden, as this was the month when he secured enough delegates to formally clinch the Democratic nomination; COVID cases nationally had also started their summer ascent. These two factors likely worked in Biden’s favor; 33 percent of respondents in June said they thought the economy would do better under Biden, with 25 percent saying the economy would do so under Trump.
Trump would rebound slightly in September and even more in October (33 percent to Biden’s 29 percent). However, Biden proved durable for the all-important election month of November, with 31 percent of car shoppers expecting a better economy under Biden, compared to 28 percent with Trump.
How They Buy:
Autolist’s survey also looked into the impact COVID was having on how car shoppers were buying their vehicles. Throughout the year, responses to these questions remained relatively constant, regardless of what the COVID cases looked like nationally.
Responses here indicated that there was no meaningful shift in how shoppers felt about moving the car-buying process online due to COVID. This was largely because people still prefer to negotiate such a large purchase in a face-to-face setting and because consumers are still wary of submitting sensitive information personal and financial information online, according to respondents.
Here are the three questions asked and their responses for the duration of the survey:
Would you be willing to do the entire car-buying transaction online rather than in person?: 44% Yes, 36% No, 20% Unsure.
Did the coronavirus pandemic change how you felt about doing the entire car-buying process online?: 61% No, 28% Yes, 11% Unsure.
What reason(s) -- if any -- make you want to do the transaction in person?: “I prefer dealing with a salesperson face-to-face” and “I’m uncomfortable submitting sensitive personal or financial information online” were the two most common answers.
In light of the significant incentives many automakers were using throughout 2020 to juice sales, Autolist also asked which of them had the biggest impact. The answer was clear: zero-percent financing was the most-chosen response by a wide margin throughout the survey’s ten months.
Autolist surveyed new and used car shoppers from March 2020 through December 14, 2020. 13,608 total responses were gathered, all from different individuals.