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Should you Buy a Car During Inflation in Canada?

Should you Buy a Car During Inflation in Canada?

Inflation has been talked about in the news since the start of 2022. Still, to the average Canadian, economics is not our passion or interest.

 

Still, now that inflation is creeping into our day-to-day activities like buying a car or financing the purchase of a home, our Acton auto loans team are going to give you a crash course on how inflation could impact your car-buying experience.

 

The global car market is on fire

 

During the pandemic, consumers around the world did not purchase any cars; no one knew what was going to happen from one day to the next with lockdowns and furloughs.

 

This demand did not go away; it was merely put on “pause.” Now that the majority of restrictions are or have been removed, the demand is back at full throttle, and everyone is trying to make up for the lost time.

 

This influx of buyers not only from Canada but around the world is great news for carmakers; however, carmakers are now being forced to pay more for raw materials and labor to produce new vehicles.

 

These added costs cannot be absorbed solely by the carmakers, some of the costs are going to be passed on to you, the buyer.

 

If you move quickly, you can buy a car that does not have a higher asking price.

 

Think of inflation as a tax that you never agreed to, which eats away the buying power of your money every single day.

 

Right now, inflation is tracking a little over 5%, which may not seem like a lot, but for the sake of simplicity, everything just got 5% more expensive, but your income did not increase by 5%, did it? So you are effectively taking a pay cut.

 

Why you should buy a car ASAP

 

  • Prices are going to rise on everything, including the cars you want to buy.
  • Interest rates are going up, the Bank of Canada is forced to raise interest rates before things spiral, and we end up in a period of hyperinflation (Argentina is an example of what happens when inflation is not kept in check)
  • Lenders will become more risk-averse and will increase the minimum credit score needed to secure a prime interest rate car loan. The minimum credit score is 680, but that requirement could change at any time.

 

Where to find the most advantageous car loans no matter where in Acton you live

 

Contrary to popular belief, you will never find the best car loans online; the most efficient way to access competitive car loans is with the help of a local car dealership. Even if you are having credit issues, the dealership has people on staff who can help you deal with any credit challenges and get approved for a car loan today. The dealerships process a large number of loans every deal; this gives them tremendous negotiating power when dealing with lenders on your behalf.

 

You need to reach out to your local dealerships today; the longer you delay buying a car, the more money it is going to cost you in the long run.

 

If you need help or advice on anything to do with auto loans in Acton, contact Car Nation Canada today, we can help!

 

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