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You Should Buy a Car this Year [2022], Here's Why

You Should Buy a Car this Year [2022], Here's Why

Canadians who anticipate needing a new car in the next couple of years should consider moving forward with the purchase as soon as possible, even if they have bad credit.


There are a few compelling reasons why an individual should move ahead with the purchase and our Caledonia car loans team are going to cover the most compelling reasons right now.


Inflation has reached an epic level


Canada's inflation levels have reached an all-time high, tracking north of 5% monthly and showing no signs of slowing down.


The Bank of Canada has a variety of tools they can utilize when trying to slow inflation; the most powerful tool is raising the prime interest rate.


When the bank raises this rate, it drives up the borrowing costs on car loans, mortgages, and just about everything else.


If you continue to wait, inflation will drive up the asking price of your new car, and rising interest rates will make it prohibitively expensive; this is why you need to move fast before rates go up any further.


Importance of having a budget in place


Everyone should have a budget, no matter how much money they earn. Without a budget, you are not able to keep track of where your cash is going, and with prices moving upward at an unprecedented rate, you should start working on your budget now.


Prior to the pandemic, the median monthly car payment was over $500, but that is going to increase dramatically this year.


So, you should look at your budget to see if you have enough to cover the new car payment and the maintenance fees that come with owning the vehicle, like comprehensive insurance.


Lenders will not issue a loan if your debt-to-income ratio exceeds 40%, so now is the time for you to reduce costs to have enough room in your budget to cover the cost of a new car.


Addressing your credit issues


With rising interest rates, lenders are more risk-averse because it costs them more to secure financing via the Bank of Canada.


As a result, lenders will only offer prime interest rate car loans to borrowers with a credit score over 720; you should spend a few moments reviewing your credit score to see where you stack up.


Even if your credit score is on the low side, if it is over 600, you should go forward and try to get a car loan in Caledonia.


You can do some things to boost your credit; one of the simplest ways to raise your credit score is to pay your debts on time and pay at least the minimum amount due.


If you fall behind on any of your obligations, your credit score will take a massive hit, so you need to stay on top of things.


Finding a great deal in these challenging times


If you have credit challenges or just want to buy a car this year for a good price, you should head over to your local car dealership today and start reviewing your options.


The dealership will find you an amazing deal and help you raise your credit score if you are having credit challenges, but you need to reach out for help ASAP.


We’d love to help you buy a car in 2022. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 


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