How rising gas prices are impacting Canadian car buyers

How rising gas prices are impacting Canadian car buyers

Posted on August 12, 2022

Prices are rising; no one is immune to the new economic realities that 2022 present. While inflation is reaching double digits and gaining momentum, hardworking Canadians are caught between a proverbial rock and a hard place.

Do they keep their gas-powered car which costs a fortune to put gas in the tank, or do they buy an EV?

There are no easy answers because each person has a unique situation, but we are going to give you the facts so you can plan accordingly.

Inflation will eventually slow, but high gas prices are here to stay

In the past, when inflation was low, gas prices would fall in tandem; however, this financial equilibrium has been altered by the carbon taxes implemented by the Trudeau Government.

These taxes make gasoline and home heating fuel more expensive than prevailing market rates. The premise behind these taxes is to force Canadians to switch to alternative energy like electricity and electric vehicles (EVs).

While there is no denying every Canadian wants to do their part for the environment, the timing of these taxes leaves much to be desired.

We are just coming out of a pandemic, and rising fuel prices impact every facet of our lives, from food delivery to medicine and everything in between; it was either trucked in or carried by rail, which requires fuel.

How to budget for an EV

One of the biggest obstacles that Canadians are facing is finding room in their budget to buy an EV.

There are some viable options available; with the used car market experiencing substantial growth, you could trade in your gas-powered vehicle for top dollar and use the proceeds from that trade-in to buy an EV.

Major carmakers like Ford are selling EVs, so you can access competitive financing options, but you will need a stable income and a decent credit score.

If your credit score is 650 or higher, you will be able to access preferential interest rates, but you need to move quickly.

The Bank of Canada has thrown caution to the wind and is doing everything it can to slow inflation. Just recently, the Bank raised the prime rate by 100 basis points. There is another rate hike just around the corner, so you need to move fast.

There is help available to you

Even if you are facing financial challenges, there are options available; instead of buying a new EV, you could purchase a previously owned model, provided you purchase it from a local dealership and not a private seller.

We cannot stress this enough; you should never buy a used EV from a private seller; you don’t know what you are buying!

By going through a local dealership, you are going to have peace of mind knowing they are going to get you behind the wheel of an EV so you can finally start saving some money.

The sooner you make the switch to an EV, the better it will be for your budget.

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