Signs of recovery in online auto trade but car finance bears impact of Covid-19

Online consumer interest in new and used cars is beginning to show signs of recovery. File picture. 

There are some causes for hope in the Irish Auto trade industry recovery but car finance continues its decline and bears the brunt of the Covid-19 impact on the sector, a digital survey has found. 

In spite of the coronavirus pandemic, online search interest in new and used cars increased 6% year on year in the second quarter of 2020 but represented a quarter on quarter decline of 8% overall meaning consumer interest has not yet returned to pre-Covid norms. 

However, a survey of 230,000 web users using terms like ‘car dealer’, ‘used car’, and ‘car finance’ conducted by Dmac Media, a website design company, found some causes for optimism heading into the third quarter of 2020.

Website traffic to car dealerships in the second quarter of 2020 has increased by 12% when compared to the first quarter and despite the pandemic and restrictive business conditions have represented a year on year user interest increase of 15%. 

A notable factor in website traffic was the device used with mobile website visits throughout the second quarter of 2020 up by 38% compared to the first quarter and accounting for 45% of all visits during the period. Desktop and tablet searches both declined respectively at 28% and 59% in comparison to mobile searches. 

A stronger third quarter may develop from this increase in consumer confidence indicated by visits to car dealership websites according to a report from Dmac Media based on the survey. 

Car finance decline

The most dramatic survey finding related to car finance however and continued the year on year trend of consumer interest decline. 

'Car Finance' as a search term continues to fall with a 27% decline compared to the last quarter of 2019 and 61% compared to this time last year.

Constrictions in the car finance market in Ireland seem evident in the survey findings according to Dmac Media as Irish consumers refrain from large value purchases or at least step away from user led car finance applications. 

The well-promoted sale of Hertz car hire's rental fleet as the result of Covid-19's impact on the tourism was also of significant interest to Irish consumers with a year on year search interest increase of 255%. 

Commenting on the survey findings, Dave McEvoy, Chief Digital Strategist and Founder of Dmac Media said: “In what has been a turbulent year for car dealers, it is pleasing to see a year on year increase in search interest for the second quarter. 

"This bodes well for a strong third quarter as customers adopt to the new normal. However, the rapid and significant decline in interest surround car finance is a worry. 

"Not only are we seeing a decline in customer actions surrounding car finance, the declining search interest surrounding the finance offering, is a clear indication that consumers are less likely to take on large overheads in the current economic climate.”