List prices at dealers have began to return down and affordability is improving, said Daniel Ross, senior manager of industry insights at Canadian Black Book.
“The new car market is normalizing faster than the used car market,” he said. “You have the supply, you have the incentives depending on where you shop, and if you’ve been a new car buyer from the beginning, this is the best situation you’ve been in for a long time.”
New automobile inventories have been rising across the country as prices for newer models have risen and consumers have been wary of huge purchases amid high inflation and rising rates of interest. Now manufacturers and dealers have introduced incentives and rebates to do away with that provide.
For recent cars, dealers can offer in-house financing through manufacturers and set rates of interest independent of bank rates, says Sam Fiorani, vp of world vehicle forecasting at AutoForecast Solutions.
“Instead of offering discounts, they lower interest rates, making deals cheaper for the consumer.”
How availability affects automobile loan rates of interest
Homeowners watch every move by the Bank of Canada in hopes of lower loan rates, but things are a bit different in relation to buying a automobile, says Shari Prymak, senior adviser at nonprofit Car Help Canada. When financing through a dealer, the rate of interest depends upon the precise make or model.
“The prices set by the manufacturer depend largely on vehicle availability,” he said.
“If vehicles are very readily available, rates will rise and prices will fall,” Prymak said. “But if the vehicle is not available and there is a long wait because it is in short supply, prices will not rise.”
