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CBB Reports Pandemic Effects on Car Buying Trends

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Report shows that Canadians are driving significantly less. Photo: Shutterstock

Canadian Black Book’s 2021 study illustrates how the COVID-19 pandemic and its economic repercussions have had a significant impact on how Canadians drive, travel, and approach buying a car.

Perhaps the most significant change that is directly connected to the effect of the pandemic, is that Canadians are driving less. 76% of respondents agree that they are driving less since the pandemic began.

This is exemplified for those 55 years of age or older, where 86% say they are driving less, as well as 82% of those in Canadian households that make over $100K per year. Alberta is the region where most respondents said they were driving less, at 84%.

“This reduction in total kilometres driven by Canadians, brought on by the pandemic, has certainly had an impact on the industry, which our research clearly shows,” says David Robins, Principal Automotive Analyst and Head of Canadian Vehicle Valuations at Canadian Black Book.

“The resultant differences in automotive buying and shopping trends and attitudes over the past twelve months are considerable, which perhaps goes without saying. However, they are very interesting to note and may help some industry people think differently about 2021 and beyond,” he adds.

CCB 2021 study
Photo: Canadian Black Book

Canadian Black Book’s 2021 study illustrates how the COVID-19 pandemic and its economic repercussions have had a significant impact on how Canadians drive, travel, and approach buying a car. Credit: Canadian Black Book

Driving less means buying less 

Those spending less time on the road due to working from home or remote learning have cut back on their driving on average nearly 50%, compared to before the pandemic.

Due to the decrease in driving, nearly 74% agree they will not need to replace their vehicle as quickly.

When asked if respondents intend to purchase a new vehicle in the next 24 months, 44% said they were likely indicating a decrease compared to the 52% likely surveyed from 2020.

Purchase intent demographics:

  • Age Group:
    • 55+ at 36% vs. 47% intention in 2020
    • 18 to 34 age group at 51%, which is a positive number, yet still substantially down from 57% last year.
  • Household Income:
    • Over $100k/year at 45% in 2021 vs. 62% in pre-pandemic 2020
  • Regionally:
    • Albertans are the most likely to buy over the next 2 years at 54%.
    • Ontarians are 45% likely versus 56% last year
    • British Columbians have the lowest likelihood at 36% this year compared to 50% last year.

Uncertainty brought on by the pandemic and recession has caused some Canadians to put the brakes on buying a vehicle. 20% say they have had to put off, delay or postpone their purchase as a result.

88% of those who have put off their decision to buy expect to postpone their purchase by a minimum of six months, including a 19% that plan to push back their purchase by two years or more.

EVs flattening  

With many Canadians feeling no great need to buy a new vehicle any time soon, it follows that intent to buy alternative energy vehicles in the near term has also decreased.

30% responded they would buy a BEV or a PHEV in the next five years (9% very/21% somewhat), a decrease compared to 37% expressed intent last year.

However, those who say they are strongly considering purchasing a new vehicle in the next two years are also the most likely to say they are going to be in the market for a BEV or PHEV in the next five years (47% likely, including 30% very likely).

Five-year purchase intent demographics

  • Regionally:
    • Quebec (35%)
    • Ontario (31%)
    • Saskatchewan/Manitoba (21%)
    • Alberta (22%)
  • Age Group:
    • 18-34 at most likely to buy EVs at 40%, which is still down 5 points from last year.
    • University graduates show a strong interest in EVs at 41%.
  • Gender:
    • Men (36%)
    • Women (24%)
How do public transit and ride-sharing fare?  

Currently, 8% of Canadians say they rely on ride-sharing services instead of owning a vehicle. Though these services remain popular, shifts in the market both before and during the pandemic mean near-term growth remains unclear.

When compared to last year, 11% of respondents in 2020 suggested reliance on ride-sharing.

  • Nearly two in ten (17%) rely on transit instead of owning a vehicle, with those aged 18-34 most likely to use transit as their primary means of getting where they need to go (25%).

As they look ahead to 2021 through the lens of the pandemic and an economic recession, it seems that not only will many Canadians be driving less, but they will also be less likely to share space transport.

  • Public transit: 45% say they will be less likely to use public transit in 2021, rising to 50% of those aged 18-34.
  • Ride-sharing: 42% say they will be less likely to use ride-sharing services over the next 12 months.

The survey finds that ride-sharing services such as Uber or Lyft are at significant risk as the pandemic drags on.

Asked to consider the pandemic and economic recession:

  • 46% say they are less likely to use ride-sharing services.
  • Women (43%) and those aged 55 and over (43%) are most likely to avoid sharing rides as the pandemic drags on.
  • 47% say their likelihood to use ride-share services won’t change
  • 7% expect their use of ride-share services to increase.

Given concerns around COVID-19: 

  • 15% have taken the step of buying a car to avoid the use of public transit or ride-sharing service (7%) or are considering it (7%).
  • Age group 18-34 are most likely to have already invested in a car (17%) or to be considering a purchase (13%).
Buying during a pandemic 

Though the current climate has unquestionably had a huge impact on how Canadians approach major purchases, some decisions are less likely to be affected.

When it comes to buying their next vehicle:

  • Economic climate:
    • 75% say that the current economic situation has no impact on whether they are more likely to buy new or used.
    • Those who do feel an impact from the economic climate:
      • Buy a used vehicle (16%)
      • Buy a new one (10%)
  • Online shopping:
    • 26% agree that the pandemic has made them more willing to shop for and purchase a vehicle completely online
    • 74% disagree, preferring to see in person what they’re buying.
    • Atlantic Canada has the highest propensity to buy online with 30% of those respondents being open to it.
    • Most popular among those who say they are very likely to purchase a vehicle:
      • In the next two years (42% vs. 14% not likely)
      • Under 35 (35% vs. 19% 35-54 vs. 13% 55+)
      • Men (32% vs. 11% women).
  • In-person:
    • 81% agree they would feel safe going into an auto dealer to shop for a car in person
    • provided the dealer adheres to public health guidelines specific to their area
  • New vs. Used:
    • 54% (down 1 point) likelihood to buy new compared to used (46%, up 1 point).
    • Parents (64%), and those with incomes over $60K are all more likely to say their next vehicle will be new.

Current vehicles owners/lessees:

  • 55% (up 2 points) say they purchased or leased a new vehicle, as opposed to used (45%, down 2 points).
Affect of the carbon tax

The federal government has recently announced that the carbon tax will be increased over the next decade, which will cause fuel prices to increase by 38 cents a litre.

It’s a move that could potentially spur movement toward more fuel-efficient cars, less car ownership, and increased use of shared transit methods.

The survey finds that though intentions toward more environmentally friendly modes of transit are lukewarm in 2021 (due in large part to the ongoing uncertainty caused by the pandemic).

When made aware of the looming rise in fuel prices, Canadians’ resolve to become more fuel-efficient in the next five years strengthens significantly:

More Likely 
In 2021  In the Next 5 Years 
Buy smaller or more fuel-efficient vehicles 25% 52%
Buy alternative-fuel vehicles 18% 45%
Reduce the number of vehicles your household owns 14% 29%
Use public transit 11% 30%
Use ride-sharing services 9% 21%

 


About the Study 

These are some of the findings of an Ipsos poll conducted between January 6 and 8, 2021, on behalf of the Canadian Black Book.

For this survey, a sample of 1,000 Canadians (who own or lease a car/truck or who are looking to purchase in the next two years) aged 18+ were interviewed. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe.

The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±3.5 percentage points, 19 times out of 20, had all Canadians aged 18+ been polled. The credibility interval will be wider among subsets of the population.

All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

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