New data from a non-bank lender has indicated the car market is “recovering strongly” after plummeting in April, with borrowers ready to begin buying cars again as the COVID-19 crisis has been largely contained within Australia.
Just yesterday, the ABS released data which revealed a 37.8% fall in the value of loan commitments for road vehicles in April.
However, in the month of May, Firstmac recorded a record number of car loan applications, with activity strengthening towards the second half of the month and continuing into June.
After taking just 721 car loan applications in March and 657 in April, Firstmac took 1,051 in May, setting a new monthly record.
According to managing director Kim Cannon, buyer behaviour through COVID has not aligned with behaviour evidenced during other times of economic hardship.
“In previous crises, people hunkered down and stopped buying anything.This time around, despite the continuing weak economy, they seem to have kept shopping by moving online and are now snapping up discounted cars,” he explained.
“As the end of financial year car sales start, many people are now getting pre-approved for car loans from us and then visiting dealerships which are packed with buyers.”
Online car broker Georgie, recently acquired by Firstmac, communicated that while the number of sales actually settled in May were low, activity had picked up sharply in the first week of June, resulting in figures higher than before the COVID-19 lockdown.
If the current trend continues, vehicle demand is likely to outstrip supply before the EOFY sales are over, according to Georgie.