“We believe the fading of the virus outbreak should promote normalization into midyear, returning growth to above potential during the second half of this year.”
According to Wells Fargo, a recession is imminent, but will likely be the shortest one ever, lasting 1-2 quarters. As of yesterday, Goldman Sachs predicted a rough second quarter with a quick recovery in Quarter 3, as seen below.
What does this mean for car buyers?
No one can predict the future with absolute certainty, but most agree that when the threat of the virus is over, the economy will recover quickly.
We are seeing two things worth mentioning:
- Better car deals– There is a steady flow of good deals because many Americans have hit the pause button on their car search. This slowdown in sales is leaving the retail and wholesale market sitting on inventory that is quickly getting stale. This three-week pause in sales is creating a need for cash and, in turn, is driving prices down. The window for this is unpredictable because no one knows how long the pandemic will last. For those with stable employment situations, it’s a good time to restart the car search.
- Additionally, the prediction is that because of shortages on automotive parts due to manufacturing stoppages, there will be a significant hike in car prices later this year. Although the economy seems to be struggling, there is good reason to believe it won’t last long, but the buying environment for car buyers won’t be ideal once the economy recovers later this year.
2. Better deals on interest rates– The U.S. Federal Reserve has made unprecedented moves this month to reduce a key benchmark interest rate to near zero. Ultimately, this has directly impacted interest rates across all industries, but specifically we are seeing a notable dip in loans for cars.
At MATS.org, we are taking the spread of COVID-19 very seriously. We are taking extra measures to protect our customers as well as our employees during this time. Our model is ideal and now the safest way to buy the right car during this unprecedented time. We’re here to offer no-pressure answers to all your questions. Call now or fill out this form and one of our car buying specialists will be in touch.