Why are Car Prices in Canada so High in 2022?
Why are Car Prices in Canada so High in 2022?
Posted on March 28, 2022
Why are car prices in Canada so high right now, along with gas prices and general living expenses? We're going to try and answer that to the best of our abilities in this 2 minute read article. We hope this helps.
You have probably seen the news about what is happening in Europe; it is on most channels 24/7. While the conflict may seem like a world away, it is impacting everyone in the world in ways most of us could never have anticipated, as our Smithville auto loans team explains.
First a pandemic, and now we are on the brink of WW3
We have spent the better part of two years battling Covid-19. From a series of lockdowns to the economy being brought to its knees, it was hoped that we could start leading a normal life; at least, that was the hope.
During the pandemic, The Bank of Canada has used every tool available to keep the economy moving; they made this pumping money into the economy.
This band-aid worked, but at great expense; all of this money printing has caused inflation to skyrocket to 5+%
It was hoped that with the removal of restrictions, the economy would recover, and things would go back to normal.
Unfortunately, NATO has implemented a series of crippling economic sanctions on Russia, preventing the country from exporting its oil being one of the most painful.
The oil market is one that is very sensitive to changes in supply; while prices take time to drop, any shortages and prices will go up rapidly.
Every country relies on oil to drive its economy, and without access, everything will come to a standstill.
Prices are getting out of control in Canada
With rising gas prices now exceeding $2 per litre, the average consumer will be forced to spend even more on basic items like food and commuting.
Businesses are now asking workers to come back to the office; with gas prices climbing, these workers will either carpool or ask their employers for travel reimbursements.
These rising gas prices mean car buyers need to look for vehicles that are more fuel-efficient because gas prices will not drop any time soon, if at all.
Cheap credit is no longer available
Another consequence of these rising costs is that central banks are forced to raise their interest rates; as these rates are increased, the added costs are passed on to you, the prospective car buyer.
Even if you have perfect credit, you will pay more for financing, and these rates will continue increasing until inflation starts to taper off.
How to find a reasonable car loan in 2022
You should not postpone your car buying with the hopes that things will get better in six months; the odds are things may get worse.
Instead, it would be more prudent to contact a car dealership and explore what loan options are currently available, even if your credit score is low.
The dealership will have their credit experts help you come up with an approach to raise your credit score.
When you go through a dealership, you can get a car loan that is competitive and be able to find a car you can drive home today.
The situation in Europe just demonstrates how fragile the global economy is and why you should always be proactive when trying to find a bargain on a new vehicle.
We’d love to help you find a great priced car loan, even though car prices in Canada are so high. Simply fill in the form below and we’ll get back to you ASAP or see our selection of new and used cars at our Brantford dealership.
Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!