To everybody’s chagrin, the coronavirus pandemic has halted most economic and social activities we have always considered normal. The risk of infection and the threat of succumbing to the infectious virus has kept many of us isolated from the outside world. Government imposed community lockdowns have limited our mobility with the hope that these too will stop the spread of the virus. Such has been the new normal for the past five months.
Unfortunately, world economies, including ours, have suffered in the quest to contain Covid-19.
Since mid-May, the Philippine government has opted to reinvigorate business over ensuring healthcare. And today, we are now faced with the new reality of having to go back to work despite an uncontrolled pandemic. We have been forced to find ways to protect our health as we contribute to the revival of the economy.
With the re-imposition of the General Community Quarantine in Metro Manila and adjoining provinces today, public transportation is poised to restart. Once again, more people will head out to report for work. The potential to spread the virus, and be infected by it, is a reality we will have to live with.
But for many, LRTs and MRTs, buses, UV express vans, taxis, even app-hailing ride services do not offer enough peace of mind, or guarantee ample protection, from the unseen enemy. That is why, for those who can afford one, buying a car has become an investment to assure their health and safety.
Despite the need and demand for cars, with the recent economic downturn, banks have not been as generous in granting car loan approvals compared to before the onset of Covid-19. With limited budgets, many would-be car buyers are now resorting to the purchase of pre-owned vehicles.
According to Clarence Chiong, Assistant Group General Manager of Carmax Auto Center in Filinvest, Alabang, pre-owned passenger vehicle sales in their dealership have gone up from 30 to 40 units a day from January to April of this year, to 60 to 70 units from May to July. “Budget cars ranging from P250,000 to P350,000 are the fastest and best-selling. Sedans and compact cars are the fastest moving and are most in demand. This is driven mostly by their affordability,” shares Chiong.
With used car showrooms normally handling cash transactions, Chiong sees a mix of middle to upper middle-income class buyers flocking to their showrooms. “Work background is varied, but we do get a lot of business owners who have ready cash to purchase a unit.”
He identifies two primary considerations of customers when choosing a car to buy. “Budget fit is the most important. Most of the time a client already knows the type of car they want based on the budget,” says Chiong. And while pricing is the main factor, he also mentions “lifestyle fit” as the second most important consideration for used car buyers.
The Carmax Auto Center executive notes car buyers weigh the intended use and purpose of the cars they are considering and finalize their choice based on which vehicle fits the role best. He adds, “Their purchase is also dependent on what they will use the vehicle for. They need to consider space if they will use it for their family; fuel economy if it’s for everyday use; or even brand, if they have a specific preference.”
Top 5 Selling Pre-owned Brands from January 2020 to Present – Data from Carmax Auto Center
Based on Carmax sales figures from the past eight months, Nissan is the most popular used car brand selected by its customers.
Top 5 Selling Pre-owned Car Models from January 2020 to Present – Data from Carmax Auto Center
The Almera, with its impressive interior dimensions, satisfies customer preferences for price, space, and brand affinity.
But it is not only the used car showrooms that are seeing an uptick during these quarantine times. For those who opt to do their car buying in the safety of their own homes, Carousell PH, formerly known as OLX, has seen the cost-effectiveness of its platform for promoting vehicle sales, both brand-new and pre-owned, as crucial to the “new normal.”
Karl Magsuci, Vehicles Commercial Director for Carousell Philippines, sees a wider budget range for the used vehicles most inquired on the website. “The general range should be from P200,000 to P700,000,” says Magsuci. “We’re talking about cars 5-years old and older, depending on the model and type of vehicle. For the typical car, the general market considers the year model. The less old, from 3 to 5 years of age, the better the choice.”
Magsuci does not see much difference in the kind of vehicles being searched on the online platform between pre- and current Covid-19 quarantine periods. “There is still a good mix of those who are looking for the typical vehicles, like subcompact cars, SUVs, light commercial vehicles and those looking for luxury cars,” says Magsuci. Although he noted that used car dealers have seen a spike in sports car inquiries from people who have extra time on their hands due to the lockdowns.
Top 5 Car Brands Searched Online – 2019 Data from Carousell Autos
Toyota remains the most popular brand even in online searches while people continue to look for good deals from BMW and Mercedes-Benz sellers.
Top 5 Car Models Searched Online – 2019 Data from Carousell Autos
1. Honda Civic
2. Honda City
3. Ford Mustang
4. Honda Jazz
5. Toyota Vios
Without much difference in data from last year to Covid-19 periods, the Honda Civic ranks on top as the car most searched by users of Carousell.ph
While online searches in Carousell Autos reveal the most sought after brands and models, the reality on the ground reveals buyers end up with a different brand and model altogether. “A buyer would usually have 2 to 3 cars in mind before they visit the showroom. Most buyers have done their research about the possible cars they intend to buy,” reveals Chiong. And with pricing, car condition, service history and the prerequisite test drive thrown into the mix, the final decision may involve the occasional change of heart.
Five months since the start of the lockdowns, and close to 170,000 Covid-19 cases later, the reality is people are in need of safe, reliable, and affordable modes of transportation. If you are one of those uncomfortable with the state of public transportation, or have finally found a logical and sensible reason to pull the trigger and purchase a pre-owned vehicle as an investment for you and your family against Covid-19, then you should be armed with the right mindset in your search for the right car.
“Buying a car, especially a used car, requires research. Not just on what unit you want to buy, but also on what things to watch out for,” says Chiong. He further explains, “It requires an understanding of how to assess if a car is in good condition and if it’s actually worth the price.” That is why according to him, it is important to choose a trustworthy seller.
On the opposite end of the equation, if you happen to find yourself with the need to let go of your car as a seller, you should have taken good care of it to be able to command a worthy price.
According to Carousell Philippines’ Magsuci, keeping a record of the services done to your vehicle, especially major repairs, along with having a regular schedule for car care service for your vehicle, adds value to it. “A preserved condition car is almost always valued higher than a reconditioned car,” adds the automotive industry veteran.
With the used car industry experiencing a resurgence, expect various sellers, showrooms and selling platforms to innovate and find ways to reach out to you, their potential customers. While competition will be present, both physical and online sellers are seeing collaborations between these channels as critical to their sustainability during these uncertain times. In the end, this will all benefit customers who are only after their health well-being as the Coronavirus pandemic continues to rage on.
Motoring and motorsports are two of Mikko’s greatest passions. Combining more than twenty years of professional automotive photography and videography experience with years of touring car racing competition, and a deep understanding of the car industry, from both the manufacturers’ and consumers’ points of view, have given him a unique and insightful perspective in the motoring beat.