Buying a Car on a Tight Budget: How to Find a Good Deal
Buying a Car on a Tight Budget: How to Find a Good Deal
Posted on October 7, 2022
If you're buying a car on a tight budget in 2022, you are in luck. We are going to give you the tips you need to get the most value for your money.
There is a catch; you will need to stick around until the end of this conversation in order to understand the “big picture”.
We’re Making a Few Assumptions
- You will need to secure financing when buying your car on a tight budget. The days of buying a used car for a few grand are long gone, even used cars with high mileage command a significant sum of cash which is beyond what most Canadians are able to come up with from their own savings.
- You need the car pretty soon and don’t have the luxury of waiting for the perfect deal.
How much to spend on a car. Source: credit donkey
If this sounds like you, then please continue reading; if not, stick around just the same; the information will help you better understand what is happening in the economy.
Used Car Prices Are Stable, but Interest Rates Are Climbing
For a time, used car prices were moving at double-digit percentages on a monthly basis; it seemed like the market was willing to pay anything to buy a used car.
Now that the buying frenzy has passed, buying a car on a tight budget is possible, but timing is key.
While the prices of used cars have stabilized, rising interest rates will make it more expensive to secure a car loan.
The Bank of Canada is struggling with runaway inflation, and the only way it can slow the effects of inflation is by increasing the prime interest rate.
Some experts anticipate that the prime interest rate will reach 4.5% in 2023, which doesn’t sound like much, but the rate during the pandemic was 0.25%!
That is a substantial increase, and it impacts not only mortgages, credit cards, and car loans but all facets of life because everyone in Canada relies on credit to get by.
Leveraging Your Car-Buying Budget
As you can see, the current financial climate is one that you must tread carefully. Something that you can do to help protect yourself is to get a car loan today and lock in an affordable interest rate.
Lenders are eager to issue new loans before interest rates creep even higher, making it more difficult for them to acquire market share.
To get the full benefit of these car loans, you need to contact your local car dealership right now and start looking at your loan options.
The good news is that used car loans are relatively easier to secure because the total dollar amount being financed is lower than what you would incur if you were buying a brand new car; just make sure your credit score is in the 600s or higher, and you should be fine.
We will use all our skill and experience to deliver the lowest possible auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.