A growing number of Canadians need to buy a new car; their current vehicle is constantly breaking down and not getting the fuel economy it once did.
During the pandemic, everyone postponed making big purchases until we could see our way clear; now that we are halfway through 2022, it seems the worse is behind us.
While there is a considerable amount of economic uncertainty with inflation tracking at an all-time high, you should seriously consider making the switch to a new vehicle as soon as possible.
Compelling reasons to buy a new car
We mentioned that prices are rising due to inflation; the vehicles that are currently for sale at your local dealership were manufactured a few months ago, so they were priced before inflation started to gain momentum.
If you waited a few more months before buying a car, the model you select would reflect the new economic reality forcing you to pay a higher price.
While you are waiting to make the switch, you will be paying for vehicle repairs that will pop up from time to time, plus high gasoline prices.
Unfortunately, gas prices have never been higher and will never go down to their pandemic lows. The reason we are confident that gas prices won’t drop is due to the carbon taxes being levied on gasoline.
Financing will become more expensive (even if you have good credit)
As the Bank of Canada increases interest rates to combat inflation, it makes it harder to finance car loans.
Lenders borrow money at prime rates, so whenever those rates increase, it forces the lender to charge you a higher rate which makes it harder to finance the new vehicle.
You could have a perfect credit score and still be rejected for a car loan because the amount of debt you are carrying does not meet the loan underwriting requirements.
Lenders cannot approve a loan if your debt-to-income ratio exceeds forty percent.
With a recession looming, your income may have been reduced so you need to start exploring your auto loan options today.
Never apply for car loans online
You are reading this article which is great, but as a general rule, do not apply for financial products and services online.
The Internet is a breeding ground of scams, and once your personal details are uploaded, they are there forever!
Aside from the risk of identity theft posed by shopping online for a car loan, the lenders online will not be able to give you a great deal. The best place to get a good deal on a new car is your local dealership.
The dealership will be able to shop all of the lenders in Canada and pick the one that is going to give you the best terms.
While some people claim that the dealership will disappear and people will buy directly from the manufacturer, we disagree; a big part of buying a vehicle is the customer service and support that can only be found at a local, independent dealership.
Do yourself a favor and go look at the cars that are available today; it will be the best decision you made all week.
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!