ANAHEIM, Calif. – There aren’t a lot of customers browsing car lots during the pandemic. In fact, the slowdown nearly cost George Rios his business, Southern California Preowned, which he founded four years ago in Anaheim.
“For a while, we thought we were actually going to be shut down for an extended amount of time so it was a very chaotic moment,” said Rios.
But instead of shutting down, Rios fought to survive and furloughed all but six of sixteen employees. He also slashed his advertising budget and he listened to customers who did not want to go to a dealership in the midst of a pandemic.
“That’s when we started offering alternatives,” he said. “What if we bring the car to you?”
That option caught the attention of college student Kattya Calderon, who found a Chevy Volt on Rio’s dealership website.
“I did not even consider leaving my home to go try to purchase a car and I noticed they were offering free test drives at home and I jumped on that immediately,” said Calderon.
Before leaving the lot, Rios says the car is thoroughly disinfected. Then it’s delivered to the doorstep where the car is sanitized again before the driver gets the keys. Everyone involved in the process wears a face mask.
Calderon took the Chevy Volt for a spin to see if it meets her expectations.
“I love it,”, she said after the test drive. But the car isn’t the only thing Calderon was thrilled about.
“I was able to see the whole process of how they cleaned down the car,” she said. “I loved it. It was a great experience.”
If she buys the car, it will be delivered to her home again and Calderon will have made the purchase without ever stepping foot on the car lot.
Rios says the coronavirus and technology have completely reversed the car buying process and made it more efficient. Rather than browsing cars at a dealership, customers can find their dream car online. He says customers reach out to the dealer and fill out an online loan application.
“The final step is to make sure you love the car,” said Rios.
The test drive is taken at the end of the process, not the beginning. Rios says cars on the lot are priced aggressively so there is little or no negotiating. He also says life is different for customers who want to visit his dealership. It’s by appointment only and no more than two people at a time.
Rios says his business is down 50 percent over the same period last year, which means a glut of inventory that results in lower prices.
“You’re going to save on average 20 percent on a car today,” he said. “As opposed to two or three months ago.”
However, it’s the opposite for trade-ins. You will probably receive less money than you would have a few months ago. But Jessica Caldwell, a car industry expert at Edmunds.com, says it’s still a great time to buy if you are in a financially stable situation and that’s not only because of the prices.
“The deals out there are probably the best I’ve seen in my 20 year automotive career,” said Caldwell. “Right now, a lot of dealerships and auto makers are offering zero percent financing as long as 84 months and the caveat is you have to have good credit. But even if you don’t, there still is better financing which is available to you today than it was 3 to 6 months ago so it’s probably worthwhile to take a look.”
Caldwell says there is also another financial incentive to consider.
“The deferred payments, which is another, you know, great thing for consumers, who don't have to pay your car payment for 60 days, 90 days, 120 days,” Caldwell said.
The coronavirus changing the way we car shop won’t last forever, but Rios believes shopping from home is here to stay.
“At-home delivery, the same way you’re able to order food from home, you’re able to order groceries from home, why not in the car industry? So I think it’s here permanently,” Rios said.
It’s a win-win situation for sellers and buyers because Rios says it means lower overhead for dealers and savings passed onto shoppers.