Published in: Banks | May 4, 2020
Is It Safe to Buy a Car During the COVID-19 Crisis?
By: Maurie Backman
Need a car? Find out if buying one now is a reasonable option.
The novel coronavirus crisis hasn't just made hundreds of thousands of Americans sick; it's also battered the U.S. economy to an extreme degree. Millions of workers have filed for unemployment in the past few weeks, while countless small businesses have closed their doors -- perhaps on a permanent basis.
At a time when so many people are in financially precarious states, it's advisable to avoid major purchases unless they're absolutely necessary. After all, the last thing you need right now is more debt or another monthly bill on your hands. But what if you need a vehicle to get to work (assuming you're an essential employee who's not working remotely), or just to get around town and buy groceries and necessities? Is it safe to buy a car right now? Or should you really do everything you can to hold off?
The danger of buying a car today
Though many workers have fallen victim to unemployment, that may not be the case for you. As such, you may be inclined to move forward with the purchase of a vehicle. But remember, the longer the COVID-19 crisis drags out, the more damage it's likely to cause the economy. If a full-fledged recession ensues, more jobs could be lost, yours included. At that point, you may really struggle to keep up with your car payments, which is why now is simply not an ideal time to buy a vehicle.
That said, if you can't manage without a car and your last vehicle has given out on you at the worst possible time, you can consider moving forward with a vehicle purchase if:
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- Your job is steady right now and you're not in an industry that's particularly susceptible to COVID-19-related layoffs. Travel or hospitality jobs are particularly vulnerable whereas say, healthcare or warehouse positions are less so.
- You have a healthy level of savings in the bank -- enough to help you stay current on an auto loan if you were to lose your job.
- Your credit score is strong, which means you're more likely to qualify for favorable borrowing terms.
Can you snag a discount on a car right now?
Auto sales have dropped since COVID-19 took hold, so many dealers are currently offering incentives to buy a car. According to car buying experts, Kelly Blue Book, the following automakers are rolling out financial programs to make buying a vehicle more affordable.
- Fiat Chrysler is offering 0% financing for 84 months and deferred payments for 90 days on select newer vehicle models.
- General Motors is offering 0% financing for 84 months on vehicle purchases with the first 120 days of payments deferred.
- Honda is offering $1,000 toward the purchase of select vehicles, as well as 90 days of payment deferrals.
- Hyundai is offering 0% financing and four months of deferred payments on new vehicle purchases.
- Toyota is offering deferred payments for 90 days on some new and certified used vehicles.
- Volkswagen is offering 0% financing for up to 72 months on new vehicles, plus 180 days of deferred payments.
Of course, if you're going to buy a car right now and can manage it from a financial standpoint, you should still take steps to do so safely. Research your vehicle options online to limit the number of dealerships you visit and the number of cars you test drive. And be sure to wear a mask when you head to a dealership, and wash or sanitize your hands after coming into contact with surfaces or showroom models. Car dealerships are considered essential businesses, and so they're open during the ongoing crisis, but it still pays to take precautionary measures if you're visiting one.
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