What Canadians need to know about the car-buying market in 2022

What Canadians need to know about the car-buying market in 2022

Posted on June 16, 2022

The market for purchasing automobiles in Canada has altered substantially during the past few years. No one could have anticipated the issues that Covid-19 presented.

While we attempt to return to normal, there are some new obstacles to consider when purchasing a new automobile.

Inflation and the pandemic have caused the average price of a new car to rise significantly

If you are wondering what the average price of a new vehicle in Canada is, it is approximately $35,000.

There are a number of factors that are driving up prices, but the primary factor is inflation.

Inflation would typically track at around 2% per year, but the Federal Government was forced to print money to keep Canadians and the economy afloat.

All of this money printing has now come to a head, and it is time to "pay the piper".

Inflation is causing tremendous hardship for Canadians; whether you are buying groceries, buying gas, or trying to save for retirement, inflation is eating away the buying power of your money.

There is not much you can do as the average Canadian to battle inflation; so long as the money presses keep printing money, inflation is here to stay.

Making the most of your car-buying budget

Now would be a great time to work on your budget. You need to allocate more cash to cover your food and utilities and also leave room for a new vehicle purchase.

If you have not received a raise at work in quite some time, you will need to ask your employer for a raise or start looking for a job that pays better.

The price of inflation: higher interest rates

The only way to slow the effects of inflation is for the Government and the Bank of Canada to work together.

The Government has to reduce spending while the Bank of Canada increases the prime interest rate it charges. When the prime rate increases, it makes borrowing more costly, which slows down the speed at which money is created.

This is a painful experience and can lead to a recession if not done properly.

With each increase, your mortgage, credit card, and, you guessed it, auto loan interest rates rise. Even if you have excellent credit, loan rates are rising rapidly, and you must get a vehicle ASAP.

Securing the best possible terms on your new car purchase

If your credit is less than perfect, you should not let that hold you back from trying to secure a car loan.

Auto loan providers are all trying to get more customers; with rising interest rates, they have less wiggle room when it comes to underwriting new car loans, so they have to make the most of every opportunity and open up to borrowers with credit issues.

With the conflict in Europe and the threat of another pandemic, there is never going to be a perfect time to buy a car.

However, one certain thing, rising interest rates and economic challenges are here to stay, so you should take advantage of this opportunity by contacting your local car dealership and start reviewing your car-buying options.

Contact Unique Chrysler for help, advice and competitive Binbrook car finance and leasing.

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