During the pandemic, everyone was fixated on when things would go back to “normal,” they did not worry too much about the government printing money and the inflationary pressures it would cause in the greater economy.
Now that we are learning to love with Covid, we are also being forced to live with inflation which is now tracking at an all-time high.
The consequence of indiscriminate spending would be painful enough, but drivers are forced to carry the burden of a carbon tax introduced by the Trudeau government, which makes gasoline and other fossil fuels prohibitively expensive.
This double whammy is forcing Canadian drivers to purchase a hybrid or EV and go further into debt just so they have a vehicle to get to work.
Canadian drivers and borrowers are at the breaking point
Household debt in Canada is roughly $1.80 for every $1.00 earned; that in and of itself is concerning but now that the Bank of Canada is raising interest rates to slow inflation, it makes servicing your existing debts all the more difficult.
Not only are you paying more to service your existing debt, but you also have less cash left over to buy food, food that is more expensive because inflation is hitting producers, and artificially high gas prices are making it harder to reach tables of hardworking Canadians.
Turning crisis into an opportunity
While this is a challenging situation, there is an opportunity to turn it to your advantage, but you need to be prepared to move fast.
Auto finance companies know that their costs of doing business are going up, so they are trying to write as many new deals as possible; this means that some borrowers with less than awesome credit can get a good deal provided their loan is funded before the next interest rate increase.
You need to look at your credit report and see where you stand; if your credit score is 600-660, you are considered average, 680 or higher, and you are doing great, 750 or higher, and you are going to qualify for the best deals.
If your credit is lousy, don’t let it stop you from trying to get a more fuel-efficient vehicle, there are still good deals out there.
Where to find lenders that will give you a good deal
While shopping online is convenient, you are not going to get a good deal. You should contact your local car dealership right away and find out what deals you can secure based on your current financial situation.
The dealership is constantly writing new car loans, so they will know which lenders are giving the most competitive terms in all of Canada.
An added benefit of working with the dealership is they can negotiate with the lender on your behalf; this is invaluable when your credit is bruised, or you are self-employed.
We have given you a lot of food for thought, but sadly you don’t have time to let it simmer, contact your local dealership today and start looking at what options are available to you.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!