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What Canadian car-buyers need to know about inflation

What Canadian car-buyers need to know about inflation

A Nobel Prize in economics isn't necessary to see the impact of inflation on the Canadian economy; all you have to do is walk into your local grocery store or petrol station, and you'll see it for yourself.

Interest rates will rise from their historic lows as the Bank of Canada tries to control inflation. As interest rates rise, it has an effect on borrowing costs that affects all consumers.

Household debt in Canada is at unprecedented levels and growing

As a consequence, the sheer amount of debt per household has increased; thus any changes in interest rates are felt instantly.

Despite the pandemic, some Canadians were able to pay down their consumer debt. If you need a new car, you'll need to move quickly because interest rates are expected to rise, as our Paris auto loans team explains.

You may be interested in trading in your existing vehicle for a new one

A significant amount of your trade-in value should still be available even if your present vehicle has high mileage.

If this current vehicle is paid in full, this can be utilized as a down payment for a newer vehicle.

Your old car loan can be transferred to your new one if you have a strong credit rating and a steady source of income.

For the foreseeable future, interest rates are expected to remain high

It will take months or years for higher interest rates to decrease inflation, so locking in a car deal now, even at an asking rate slightly above prime, will appear like a bargain when contrasted to what people will be paying a year from now.

Your credit score must be above 700 to qualify for the best interest rates.

There are vehicle loans for people with 600 credit scores, but the interest rate is going to be higher than it is for people with 600 credit scores.

However, considering how high-interest rates are going to rise, it's a good idea to apply for a loan.

A long-term strategy for purchasing a vehicle

Since financing rates are rising, you should choose a car that will serve your needs for the next four to five years or more.

When it comes time to acquire a new car, things should be stable after this amount of time.

The best financing conditions can only be secured by contacting a local vehicle dealership, even if you have credit issues.

You'll get a terrific deal from the dealership since they'll shop the entire Canadian market for you. This means that you will benefit greatly from having your dealer handle your interest rate negotiations.

To ensure that you can get the best rates on future auto loans, the dealership has credit specialists on staff who can advise you on how to improve your credit score.

It's time to get in touch with your local dealership now that you know what's happening in the Canadian automobile buying industry.

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

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