What used to be a rather stable market for purchasing automobiles in Canada has seen significant shifts in the past few years. Covid-19 posed problems that were completely unexpected.
While we attempt to return to pre-pandemic routine, there are a few things to keep in mind when searching for a new car.
In the wake of the pandemic, car prices have risen dramatically.
A brand-new vehicle in Canada might easily cost you over $40,000. Many factors, but inflation in particular, are contributing to the current upward trend in prices.
During the initial stages of the pandemic, the Canadian government mandated that all citizens remain in their homes for two weeks in an effort to reduce the pandemic’s exponential growth curve.
However, the vast majority of Canadians lacked the financial means to comply with this directive.
The Canadian Emergency Response Bank (CERB) was established to assist Canadians in surviving during the Covid-19 conflict; the CERB and related measures to help Canadians stay afloat sounded like a godsend, but they had an unintended consequence: inflation.
(The Weimar Republic is a good example of the damage that may be done to an economy when a government prints money without restraint).
Since inflation has increased the cost of living generally, the price of automobiles has followed suit.
These escalating expenses are making it more challenging to save up for major purchases like a new vehicle.
Strategies for getting more value out of your money
Now is the moment to revise your 2022 spending plan if you haven’t already. As the price of gas and groceries continues to rise, you will need to reallocate some of your resources.
Expect to pay 5–10% extra at the checkout, maybe more depending on where you live in Canada due to the growing expenses of fuel, even if you aren’t currently driving a car.
Bad news: interest rates are on the rise and will continue to rise
The Bank of Canada was tasked with a difficult balancing act: maintaining a 2% inflation rate while keeping the country’s money supply at a healthy level.
Since last month, inflation has been running above 5%, we can anticipate several large hikes in the prime interest rate in fast succession.
The interest you pay on your mortgage, credit card, and vehicle loan will all rise in tandem with the rate.
You can’t afford to wait much longer to buy a car, even if you have excellent credit, because interest rates will soon begin to rise sharply.
Tips for negotiating a low price on a brand-new automobile
Even if you have credit problems, you can still find affordable new cars. In spite of what the ads may lead you to believe, you will not find these savings when searching online.
A better course of action would be to go to a local auto dealership and inquire about the financing alternatives available to people in your financial circumstances.
Even if you’re having credit problems, the dealership will be able to assist you if you reach out to them.
Omicron, the European turmoil, and domestic price increases all point to 2022 being a trying year. But life must go on, and in Canada, you need an automobile to conduct a regular life, so call the dealer right away.
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!