Canadians buying a car in 2022 will face a unique series of challenges that haven’t been experienced in a generation.
Inflation has reached an unprecedented level here in Canada; with the current rate well over 5%; you are paying more for everything that includes the price of both new and used cars.
Bargains are harder to find
While inflation is one unique challenge that Canadians are going to face when buying a car in 2022, it is not the only thing.
The pandemic has caused massive hiccups in the global supply chain, and the altercation in Europe has brought the supply chain to the breaking point. As a result, carmakers are not able to produce enough vehicles to meet global demand.
This limited supply of new cars has driven up prices until supply has reached pre-pandemic levels.
Since there is a limited number of cars and a large number of buyers, it is a seller’s market. While you may not be able to get a discount off the MSRP, you can get a really good deal financing the deal, but you need to move fast.
The Bank of Canada is actively raising interest rates. Once these rates increase, then lenders that provide auto loans will increase their loans.
This will drive up your borrowing costs.
Interest rates are going to continue increasing every quarter, if not sooner, so you need to start exploring your auto loan options right away.
The importance of having a good credit score
You need to have a good credit score if you want to secure the most competitive terms.
Right now, lenders require a credit score over 680 to get the prime interest rates, but that requirement may increase.
Do you know what your current credit score is? Free services like Credit Karma will let you access your credit score in real-time.
Even if your credit score is under 680, you should not wait; you may be able to get a good deal before interest rates start to rise.
Spend a few minutes reviewing your credit report to see what is causing your score to fall below the 680 target.
A common reason why scores all is when a person is carrying too much debt, household debt in Canada is at an all-time high.
If your credit utilization rate is over 30%, it will negatively impact your credit score.
The best way to get a great car loan in Canada
If you want to get a great car loan in Canada, don’t waste your time looking online for loans, you will not find a great deal there.
The best source of car loans in Canada is by going through a dealership in your area. Dealerships have a vast network of lenders, and they will shop around to find the lender that will give you the most preferential terms.
When you have identified the lender with the best deal, you can lock in the offer before interest rates start to rise.
There is an opportunity to buy a car at a great price, but you need to move fast before the market conditions change.
Fill in the form below to get approved for your next car loan! we have a team of credit specialists ready to help you with buying a car in 2022 suited to your needs and will work with you no matter your credit score.
For any questions or concerns, please don’t hesitate to contact us here!