Why your First Time Car Purchase should be at a Dealership

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Why your First Time Car Purchase should be at a Dealership

Posted on March 24, 2022

If this is your first time car purchase in Canada, there are some unique challenges that you will face that no one has faced before. We are not trying to scare you but to prepare you for the different post-pandemic work we are living in.

 

Prior to the pandemic, if you wanted to make a first time car purchase, you would head over to a local dealership, pick the car you wanted, sign on the dotted line and drive home.

 

The pandemic has wreaked havoc on the global economy and specifically on the car marketplace.

 

Carmakers can no longer get enough raw components to produce cars. These microchips are vital, and vehicles cannot be produced without them.

 

This lack of production has reduced the sheer number of vehicles that are being produced, even though demand for new cars globally has risen.

 

You would think that with record inflation at 5%, it would slow down demand, but people need cars to get around and will pay whatever it takes to get one.

 

Credit markets are tightening up

 

The Bank of Canada has recently increased the prime lending rate by 25 basis points which is not a lot of money, but this impacts the prices of everything in Canada that is financed.

 

The main issue with the increased prime rate is the Bank of Canada is saying the party is over and money is no longer going to be cheap.

 

When interest rates are low, lenders are under pressure to lend out more money to generate enough profit to cover their expenses and generate a profit.

 

However, there is a finite number of qualified buyers who have good credit and sufficient income to service a car loan; the lenders are facing the challenge of not issuing loans to borrowers who will default while still remaining profitable.

 

The lenders are mitigating that risk by relying more on credit reporting than ever before.

 

In the past, a person with a 600-credit score would be able to get a decent car loan, but now that same person would need a 680 to get a good deal.

 

There are still lenders out there who will offer loans to borrowers with bad credit, but you won’t find them on your own; they do not market their loans online.

 

Where to secure the most competitive car loans in Beamsville

 

If you want to secure the most competitive car loans in Canada, as mentioned, you will not find them on the Internet.

 

The best way to access these loans is with the help of car dealerships that are in your community.

 

These dealerships know all of the lenders in the marketplace and will be able to find a lender that will give you a great deal, even if you have less than perfect credit.

 

While the dealership is able to help you realize your goal of buying a new car, you need to make the first move and contact them. With the lack of inventory and challenging economic conditions, you cannot afford to wait any longer.

 

We’d love to help you make your first time car purchase. Simply fill in the form below and we’ll get back to you ASAP or see our selection of new and used cars at our Burlington dealership. 

 

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