What every Canadian needs to know about car loans in 2022
What every Canadian needs to know about car loans in 2022
Posted on May 9, 2022
Anyone in Canada who is thinking about buying a car should begin looking for a suitable vehicle as soon as possible. There are many compelling reasons why you need to buy a car and our Burlington auto loans team will cover the primary reasons you need to take action immediately.
Inflation is driving up the costs of everything
Inflation is tracking at an unprecedented 5+% which has never happened in a generation. This inflation has caused the prices of just about everything to climb higher, including car prices.
While car prices are affordable now, carmakers will need to raise prices in the future.
Interest rates are going up
The Bank of Canada is raising interest rates in a bid to try and slow inflation. Rates have been increased from 0.25% to 1%, and those rates are expected to rise again very soon.
All major lenders use the Bank of Canada prime lending rate as the starting point when pricing out a Burlington car loan, so when the prime interest rate goes up, it raises the amount of money you need to pay on your car loan.
The sooner you are able to lock in a car loan, the more money you will save over the long term. These rising interest rates impact car loans and all borrowing costs, including mortgages.
The average Canadian household is under tremendous pressure as it is; these rising interest rates are just another challenge.
The importance of having good credit
The majority of Canadians rely on credit to lead a normal life; having good credit has never been more critical. When shopping for a car loan, your credit score will literally make or break you.
Right now, to access the best car loan interest rates, you need a credit score of 720 or higher.
If your credit score is under that mark, you can still get a car loan, but the interest rate will be higher than prime.
It would be best if you worked on boosting your credit score; start by signing up for free credit monitoring services like Credit Karma and find out what is the root cause of your low credit score.
A leading cause of low credit scores is not making your minimum payments on time. Fortunately, you can avoid that issue by signing up for pre-authorized withdrawals.
Where to find the best car deals in Burlington
If you were going to say “online,” you may be surprised to hear that it is not the best place to find a great car loan. Your best option is to work with a local car dealership.
The dealership will have access to lenders that do not deal with the public, plus the dealership will have access to the best financing plans, including 0% for certain makes and models of car.
If you have credit challenges, the dealership will have lenders in their network that can help you get approved for a car loan; these are just some of the reasons why you need to contact your local dealership today and start looking for a great car.
Contact Unique Chrysler for help, advice and competitive Burlington car finance and leasing.