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How rising interest rates impact Canadian car buyers

How rising interest rates impact Canadian car buyers

Whether you are planning to get married, buy a house, or in this case, a car, rising interest rates will force you to rethink your strategy, as our Smithville auto loans team explains.

Overcoming the effects of inflation

Inflation has become the buzzword of 2022, so much so that everyone is talking about it; just go to your local Tim Hortons, and that is all people are talking about, how prices on everything are going up, but wages aren’t keeping pace.

Inflation was caused by the Trudeau government spending indiscriminately, and while some of the spending was necessary due to the pandemic, for the most part, their unbridled fiscal restraint has caused untold pain for Canadians from coast to coast.

This is not politically fuelled resentment, just frustration at how these fiscal decisions have created a perfect financial storm for Canadians.

If inflation is not brought under control, we could end up like Argentina; while most Canadians believe the resource-rich country will always be wealthy, there is a finite amount of money you can print before things get ugly.

Fighting the good fight

To rein in inflation, the Bank of Canada has to increase interest rates to the point where it causes a recession; this is the only option. These higher interest rates have a direct and indirect impact on consumers.

All of your financing needs, including a car loan, are going to be more expensive, even if your credit is perfect. But what makes this situation more challenging is that every business out there is also going to be hit with higher interest rates.

Those costs are going to be passed on to you, the consumer. So, this is a double whammy that will take years to correct itself.

Making sense and saving dollars out of this situation

Life must carry on, whether we like the current economic climate or not. Since Canadians need a vehicle to get around, there are a few things you can do to help give you a better-than-average fighting chance.

The first is to only work with local dealerships in your community. There are websites that offer car loans in Smithville and claim to have the best terms, but we are dealing with serious amounts of cash.

This is not something that can be handled with a few emails back and forth; you need to work with someone in-person who can help you navigate the tricky world that is auto financing in Canada.

These dealerships have the ability to negotiate a lower interest rate on your behalf and can show you credit-building strategies that work, especially if your credit score is on the weak side. So, you should do yourself a favor and reach out to your local dealership today.

With inflation and rising interest rates making everything more expensive, the longer you wait, the more it will cost you in the long run.

We will use all our skill and experience to deliver the lowest possible Smithville auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

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