Survey Says

Autolist: Zero-percent financing offers driving new car sales as industry begins rebound

Eileen Falkenberg-Hull
May 7, 2020, 6:28 am

Many automakers are offering incentives to spur buyers into purchasing.

Photo courtesy of Toyota Motor Sales U.S.A. Inc.

According to a new survey by auto-shopping website Autolist.com, zero-percent financing offers currently have the biggest impact on car sales. Nearly half of the 1,436 respondents chose that option from a list as part of a survey conducted in April, at the height of the coronavirus pandemic.

"These are highly unusual and uncertain times for all consumers thanks to the coronavirus," said Chase Disher, analyst at Autolist. "So it's no wonder that car shoppers prefer the long-term stability that zero-interest loans provide."

As part of the survey, respondents were asked to pick up to three types of incentives that would make them more likely to buy or lease a new or used vehicle at that moment. Survey takers could choose from the following options: zero-percent financing, flexible payment plans for loans or leases, deferred payments at the beginning of the loan or lease, limited-time payment forgiveness if a buyer loses their job, owner loyalty cash, waiving of late fees on loan or lease payments, other, unsure.

The results were as follows:

  • Zero-interest financing: 48 percent.
  • Flexible payment plans for loans or leases: 32 percent.
  • Deferred payments at the beginning of the loan or lease: 27 percent.
  • Limited-time payment forgiveness if a buyer loses their job: 24 percent.
  • Owner loyalty cash: 17 percent.
  • Waiving of late fees on loan or lease payments: 16 percent.
  • Other: 10 percent.
  • Unsure: 10 percent

Additionally, 13 percent of those who answered the survey said none of these offers would make them more likely to buy a car during the coronavirus pandemic.

"Consumers' mood really bottomed out in late March and early April, according to our poll," Disher said. "And while there is still a lot of uncertainty about recovery in the next few months, our data is showing that car shoppers are feeling confident in the long-term health of the economy and their decision to buy a car in 2020."

Most automakers are currently offering some level of incentive in an attempt to spur customers into purchasing. Autolist has a full rundown of the incentives that automakers are offering during the COVID-19 pandemic is available here.

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Industry news

New Honda supply may be limited for a while

Honda notified dealers of upcoming supply cuts.

Photo courtesy of American Honda Motor Co., Inc

Honda, like all major automakers today, is truly a global operation. Though it produces plenty of vehicles here in the United States, many of the components it relies on for manufacturing come from elsewhere in the world. That means Honda, like the other auto giants, needs its global supply chain operating smoothly in order to prevent disruption. Unfortunately for Honda dealers and potential customers, disruption is what's about to happen. The automaker recently sent a letter to its dealers, forecasting reduced vehicle supply in the coming weeks.


2021 Honda Ridgeline No. 19 - Honda Photo courtesy of American Honda Motor Co., Inc


The dealer letter, posted to the Civic XI forum and fan site, was dated August 25 and confirmed by a dealer upset with the development, according to Automotive News. In the letter, Honda cites the ongoing pandemic and microchip shortages as major factors impacting its production efforts. Total shipments to dealers could be cut by up to 40 percent, but not all models will be affected to the same degree.

The letter noted that supplies of the Pilot and Passport SUVs will hold steady, and shared that production of the Civic hatchback is on schedule. However, the situation is fluid and could change at any time, so there's a chance that timelines could speed up or slack off as necessary.


2022 Honda Pilot Some models will see more cuts than others.Photo courtesy of American Honda Motor Co., Inc


Honda is just the latest in a long line of automakers struggling to keep pace with demand in the face of several converging global crises. In an effort to keep vehicles rolling out of factories, General Motors has implemented selective feature cuts in some of its new vehicles, such as the removal of engine start/stop tech from some trucks and SUVs. Earlier this month, Ford Motor Company told Mustang Mach-E buyers to expect delays of at least six weeks as it grapples with the chip shortage, and will temporarily reduce production capacity at a few of its plants.

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Vehicle sales numbers

Toyota has sold over 50 million Corollas

Toyota has sold tens of millions of Corollas over the last 55 years.

Toyota

The Toyota Corolla entered its 12th generation in 2019, after more than 50 years on sale. Now, in 2021, the automaker says the car has reached another benchmark, this time with an almost unbelievable number attached to it. In Today, Toyota says that in July 2021, it sold the 50-millionth Corolla. That's almost one Corolla sold for every six Americans alive today, though the sales total includes international vehicles as well.


1969 Toyota Corolla The Corolla's frugal powertrain helped it grow quickly in the United States.Toyota


The Corolla debuted in 1966 but didn't make its way to our shores until spring 1968. Sold as a 1969 model, the car had a starting price of around $1,700 at a time when the median household income was $7,700. The first cars had a short-stroke 1,077-cc four-cylinder engine, 12-inch wheels, and a four-speed manual transmission. That powertrain produced only 60 horsepower, which was good for the car to (eventually) reach 60 mph in about 17 seconds.

Though the car's quality and design helped, it was the oil crisis in the early 1970s that really pushed it to the top of buyers' lists. Big American cars powered by V8 engines fell out of favor as fuel rationing and higher prices took hold. The early Corolla's fuel economy of over 35 mpg helped it earn a place in many Americans' driveways as a result.


2021 Toyota Corolla Cross 2021 Toyota Corolla Cross Photo courtesy of Toyota Motor Corporation


Toyota notes that it was building Corollas in the United States by the mid-1980s and says that the current generation car is built at its manufacturing facility in Mississippi. The automaker's new joint plant with Mazda, which is located in Huntsville, Alabama, will start building the new Corolla Cross this summer.

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