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How Inflation is Impacting Buying a New Car in Hannon

How Inflation is Impacting Buying a New Car in Hannon

Car buyers throughout Canada have their work cut out for them if they want to get a competitive interest rate car loan in Hannon.


Inflation has driven up (pun unintended) the retail prices of both new and used cars, so if you were thinking about buying a used car to save money, your savings might not be that substantial.


The cause of inflation can be traced back to the Covid-19 pandemic; the Government of Canada asked everyone to stay home aside from essential services.


This series of lockdowns stopped the economy in its tracks.


To help alleviate the suffering faced by Canadians that were ordered to stay home, the Government issued programs like the CERB, which helped keep food on the table for most Canadians.


This spending which totalled hundreds of billions has caused inflation to track over 5% monthly; you have probably experienced inflation at the gas pump and grocery store, where everything is getting more expensive.


Increasing interest rates to slow inflation


The Bank of Canada has the difficult task of trying to rein inflation back to the target rate of 2% per year.


The Bank of Canada is aggressively increasing the prime interest rate it charges banks to borrow money for loans to reach this goal. When the prime interest rate increases, it drives up borrowing costs on everything, including Hannon car loans.


The higher interest rates on car loans mean you have to pay more for a car, even if you have good credit.


Since it costs more to service the debt on your car loan, it leaves less cash for the principle.


Your options are either paying a higher monthly payment or extending the term of the loan, in either case, you are going to be digging deeper.


Selecting the vehicle that has good resale value


Since you will be paying a higher price for a new car, you should select one that will have a good resale value when it comes time to switch vehicles.


You will need to do your own research but target brands like JEEP that have been around for the better part of the century.


The last thing you want to do is spend your hard-earned money on a brand that has not stood the test of time.


Finding the lender that is going to provide you with the most competitive car loans


You should go through a local car dealership whether you have good or bad credit. The dealership has access to lenders that the general public cannot access.


The dealership has in-house credit consultants that can show you what steps you must take to boost your credit score.


An added benefit of working with a local dealership is their existing inventory of cars for you to choose from. This will help you save a tremendous amount of time and still find a car that will meet your needs and budget.


We are in for a challenging 2022, but with this advice, you can get a good deal on a new car; timing is everything, so contact the dealership today.


We’d love to help you find a new car in Hannon. 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. 


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