COVID-19 contributes to massive slide in new car sales

author-avatar By on April 03, 2020
COVID-19 contributes to massive slide in new car sales

Photo by Jan Kopřiva on Unsplash

New car sales in March plummeted by nearly 18% as the coronavirus (COVID-19) pandemic takes its toll on the car industry too.

The Federal Chamber of Automotive Industries (FCAI) today reported 81,690 total new vehicles were sold in March 2020, a 17.9% decline from March 2019. 

This is a huge decline compared to previous months, and represents a fall of more than 17,500 vehicles. 

In the market for a new car? The table below features car loans with some of the lowest fixed and variable interest rates on the market.

Lender
Advertised rate Comparison rate Monthly repayment Interest TypeVehicle TypeMaximum Vehicle AgeOngoing FeeApplication FeeTotal RepaymentEarly RepaymentInstant ApprovalOnline Application

FixedNew1 yearMore details

Green Car Loan

FixedNew, Used99 yearsMore details
APPLY ONLINE
  • No extra repayment or early exit fees
  • Up to $75,000 in loan amounts
  • Funding approved within 24 hours
APPLY ONLINE
FixedNew4 yearsMore details
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
GET APPROVED WITHIN 24 HOURS

Car Loan (New and Dealer Used) (< 5 years)

  • Approval in 24 hours
  • Balloon options to reduce repayments
  • No ongoing fees, no discharge fee
FixedNew2 yearsMore details
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
QUICK APPLICATION PROCESS WITH NO FEES

New Vehicle Fast Loan Low Rate

  • Quick application process and no monthly fees
  • Low fixed interest rates with terms of up to seven years
  • New car loans cover cars up to 3 years old
FixedNew1 yearMore details
No ongoing fees

Plenti Car Loan

No ongoing fees

Plenti Car Loan

    FixedNew, Used7 yearsMore details
    No ongoing fees

    Plenti Car Loan (Refinance)

    No ongoing fees

    Rates based on a loan of $30,000 for a five-year loan term. Products sorted by advertised rate. Rates correct as of October 26, 2021. View disclaimer.

    Throughout 2019 there was a 7.8% year-on-year fall, while November's figures saw a 9.8% decline. 

    The March monthly result represents the 24th consecutive month of negative growth for the automotive industry in Australia, which is now two full years of no positive growth in car sales.


    vehicle sales YTD March

    Source: FCAI

    FCAI attributed this month's significant decline to the difficult economic conditions created by the COVID-19 pandemic, but chief executive Tony Weber reiterated that despite the difficult conditions, a number of car dealerships remain open. 

    “Many dealerships have opted to remain open to maintain support for customers, particularly from a service perspective, during this difficult period," he said. 

    “Of particular importance are first responder and essential services vehicles. We must keep these vehicles on the road to ensure our communities continue to function and remain safe.

    “In addition, we need to ensure those who physically attend their workplace can travel safely."

    Mr Weber also said motor vehicles are a safe form of transport in a time of social distancing.

    “Within dealerships, customer safety is of the highest priority, and automotive brands have initiated a variety of enhanced hygiene protocols and contactless consultations to maintain personal distance,” Mr Weber said.

    Toyota was the best-selling brand in March, with 17,583 sales recorded.

    In second place was Mazda with 6,819 sales, followed by Mitsubishi with 6,002 sales, Kia with 5,654 sales and Hyundai with 5,306 sales.

    The Toyota Hilux was the most popular March vehicle, as it usually has been in previous months, followed by the Ford Ranger, Toyota RAV4, Toyota Corolla and Holden Colorado. 

    Sales for the month consisted of 21,777 passenger vehicles for a 26.7% market share, 39,171 SUVs (48.0%) and 18,162 light commercial vehicles (22.2%).

    Used car buyers urged to exercise caution amid COVID-19 frenzy

    More people are looking to buy used cars during the pandemic, according to GlobalX, as people seek to avoid places like dealerships and instead go for a more private method of car buying. 

    However, most second-hand car buyers fail to confirm if the vehicle they're buying is encumbered in any way (such as still having finance owing on it) through the Personal Property Securities Register (PPSR), according to the 2019 Gumtree Second Hand Economy Report.

    GlobalX CEO Peter Maloney has urged buyers to secure their purchase of a second-hand car before buying. 

    “Sellers are often happy to provide condition reports, roadworthiness certificates or proof of registration, but it’s unlikely they would disclose whether the vehicle had a dubious history,” Mr Maloney said.

    “Purchasers can conduct the necessary checks through a PPSR report to ensure the asset they are about to purchase will not cause unnecessary strife in years to come."

    Meanwhile, a car-subscription service Popcar is significantly cutting down on membership fees and hourly rates to make it easier for people to rent a car rather than buy one. 

    "One of the serious implications for many people will be the impact on their ability to get around, as confidence in public transport diminishes due to strengthening of the Government’s social distancing measures and concerns about contagion," Popcar director Anthony Welsh said. 

    “We recognise we have a role to play in supporting locals and businesses in our community, by providing an affordable and safe transport option to those who do not have access to their own car, or otherwise typically rely on public transport, taxi services or ride sharing."

    Popcar's changes include:

    • Waiving all membership fees for new and existing customers, including business customers
    • Cutting hourly and daily rates by 50%
    • Charging just $1 for signups 


    Disclaimers

    The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

    • The big four banks are: ANZ, CBA, NAB and Westpac
    • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
    • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
    • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

    Some providers' products may not be available in all states.

    In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

    *The Comparison rate is based on a $30,000 loan over 5 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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    author-avatar
    William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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