One in Four With Current Car Loans Gained a Deferral During COVID-19

New survey of 1000 Australians learns attitudes to purchasing cars online during Covid-19 lockdowns
Published on March 12th, 2021
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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   Commentary by 
Bill Tsouvalas

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Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Australia car loan deferral survey

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A survey of 1,001 respondents commissioned by Savvy was split right down the middle among Male and Female demographics and almost evenly among all major age groups (18-24, 25-34, 35-44, 45-54, 55-64, 65+) showed that about 20.3% had bought a new car during the COVID-19 pandemic.

  • 53.3% happy with current vehicle, saw no reason to upgrade
  • One-in-four with current car loans gained a deferral
  • 4.3 million Australians are estimated to work from home
  • 20.3% of those surveyed purchased a new car

Deferrals on the rise

The survey also showed that 25.5% of people with an active car loan requested a payment deferral during the pandemic.

20% of people on JobKeeper payments also directed some of the funds to cover their car loan repayments.

“One in four people have gained a deferral, which means lenders and brokers are trying hard to reach equitable arrangements with people undergoing hardship due to the pandemic,” Tsouvalas says. “However, the industry must have a plan in place for vulnerable consumers when JobSeeker and JobKeeper end, if a robust recovery isn’t forthcoming.”

Car buying during COVID-19

About 40% respondents said they were “extremely uncomfortable” about home-facilitated test drives, virtual demonstrations, remote payments, and dealer delivery. 4% said they were “extremely comfortable” with online buying arrangements. “It seems we’re not quite there yet when it comes to buying big assets like cars online,” said Bill Tsouvalas, Managing Director of Savvy. “We don’t want to buy a car sight-unseen, but we are still in the market for cars and vehicles in general. Work From Home doesn’t seem to have made much of a dent in consumer sentiment – but the fact many aren’t prepared to take a leap of electronic faith has.”

Despite a removed need for commuting to the office or workplace, the work from home arrangements were the third least cited reason (3.9%) for holding off on buying a new vehicle. The bottom two results were job loss (1.6%) or using a partner’s vehicle instead (1.9%).

Almost all states in Australia instituted some form of social distancing or lockdown in March this year, which meant many had to work from home. This also meant they were unable to visit dealerships to inspect or purchase vehicles.

According to Roy Morgan research, a third of Australia’s workforce is now working from home, or 4.3 million Australians. 

“Aussies see car ownership as fundamental, not just as a means from getting to and from work,” Tsouvalas says. “It’s for getting around, taking holidays, getting the kids to their activities, and just to have that sense of freedom.”

Among the top reasons for holding off on buying, 20.7% of respondents said they were concerned about personal finances, 9.6% said they were comfortable with using public transport or alternative transport, and 9% said they’re waiting for better bargains. 53.3% said they’re holding off as they say it’s too early to upgrade.

The Federal Chamber of Automotive Industries recorded a 21.8% drop in car sales in September 2020 compared with the same period last year.

Savvy - 2021 Car Buying Survey (n = 1001) 

Nationally representative survey of 1001 adult Australians, aged 18 and over. Conducted by Octopus Group, on behalf of Savvy.

Completion date: 12/02/2021

Age groups:18-24, 25-34, 35-44, 45-54, 55-64, 65+


FWC.gov.au - according to Roy Morgan Research 

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