Social distancing and tight consumer budgets amid COVID-19 may be a boon for the used car industry.
“We’ve seen a huge increase of people coming to shift.com,” says George Arison, founder and co-CEO of the peer-to-peer car marketplace.”It's been kind of incredible.”
Arison told Yahoo Finance’s The First Trade business picked up after initially declining due to shelter-in-place measures to contain the virus.
“Within a couple of weeks, sales came back. We finished April down, only about 11% off of February and May is now trending to equal where we had hoped April would be, pre-pandemic, with pretty substantial growth over last year,” said Arison.
“A lot more subprime applicants for financing for example, a lot more searches for domestic versus foreign made cars, and people are buying cheaper vehicles” he said, noting customers are spending about $1500 less per purchase — eyeing starting prices of around $14,000 versus $15,500 pre-pandemic.
“In an economic downturn you'd expect people to buy cheaper items,” said Arison.
Consumer shifts towards home delivery during the pandemic are also benefiting his company.
“We bring the car to the customer, and have done that for years now,” said Arison.” We're now seeing a lot more people transition to home delivery for everything else. And so [that] our model is very well designed for that is going to be helpful for us.”
‘We’re going to see a pretty steep decrease’ in ride-sharing and transportation
“My sense is that we're going to see a pretty steep decrease in usage of ride sharing in the coming couple of years. Same thing about public transportation. I think people are pretty skittish about getting into public transportation,” says Arison.
Some people are even required to avoid it. The New York Stock Exchange told its employees they need to avoid public transportation when some of them go back to the floor when it re-opens next Tuesday.
“You're gonna see kind of a wave of people wanting to have a vehicle and not do public transportation or ride share,” he added.
Ines covers the U.S. stock market from the floor of the New York Exchange. Follow her on Twitter at @ines_ferre