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Is it a good time to buy a used car in canada?

Is it a good time to buy a used car in canada?

Throughout 2021 and into the mid-way part of 2022, the prices of both new and used cars in Canada seemed to be out of control; as we are entering the Fall of 2022, it looks like used car prices are starting to settle down, at least for now.

 

While new car prices are still being directly impacted by supply chain issues and inflation, it appears that used car prices are not experiencing the same effects.

 

What has fueled demand for new and used cars

 

The pandemic is the primary culprit; Governments were printing large sums of stimulus money to keep the economy going, and consumers spent this cash on a variety of things aside from rent and mortgages.

 

Since the government had implemented moratoriums on evictions and foreclosures, consumers had little to no incentive to pay these debts.

 

Not only were consumers able to get their hands on free money, but car-buyers from around the globe were also flush with cash.

 

Buyers in developing continents like Africa were buying used cars from auction websites. These new buyers were willing to pay a premium for these used cars and ship them via container ship to Africa.

 

Instead of Canadians competing with other used car buyers in Canada, they were going up against buyers from overseas who had deep pockets and were willing to pay any price for the used car.

 

Like all things, the good times of free money have come to an end thanks to inflation.

 

The largest central banks in the world have started to turn off the free flow of money and have increased interest rates.

 

As interest rates rise, it forces more lenders to increase rates, and this reduces the total number of people who can get loans.

 

The used car market tends to attract borrowers with credit issues that the new car market does not attract, so it stands to reason that the used car market is the first to experience the pains caused by rising interest rates.

 

So what does all of this mean for the average Canadian looking to buy a car

 

If you have been waiting for the right time to buy a used or new car, the time to move forward is now!

 

While interest rates are relatively affordable now, in a matter of months, rates will reach unprecedented highs, and you will find yourself in a situation where you may not be able to get any affordable financing at all, even if you have good credit.

 

The only way that you can protect yourself from these hardships and come out ahead is to move quickly; start by working with your local car dealership and get pre-approved for a car loan.

 

At least with this information, you will know how much of a car you can afford, there is no obligation with the pre-approval, and at least the interest rate will be locked in.

 

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.

Categories: Auto Loan

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