Looking to buy a car? With an average price tag of $46,000, we’d recommend walking.
What’s happening: The cost of hitting the open road is skyrocketing. Per The Globe and Mail, you can thank pent-up demand—following those pesky Covid-era factory shutdowns and parts shortages that left dealerships sitting empty—mixed in with rising loan costs.
- On average, Canadians are paying the same amount for a used vehicle today as they were paying for driving a shiny car off the lot back in 2019—about $35,000.
- Per The Globe and Mail’s Rob Carrick, the average monthly loan payment for a new vehicle is about $880, and almost 30% of borrowers are paying $1,000 or more.
Why it matters: High car prices could bite both buyers and lenders. High-interest rates could stick borrowers with loans that quickly become worth way more than their vehicles, and lenders might be stuck with a growing number of borrowers defaulting on their loans.
Bottom line: Cars are getting fancy (and electric), which means—rising cost of materials aside—making them is super expensive. That’s not a good sign if you’re waiting for a deal, but there’s hope that dwindling demand could take pressure off the used car market.—LA
