GM Canada has already rolled out 0% financing on nearly all 2007 models. Ford, Chrysler, Honda, Toyota are all in the game. If your looking for a new or used vehicle, Car Loans Canada's lenders are primed. I was speaking with a dealer friend of mine the other day. She mentioned her bank representative had informed her that the number of loan applications for August is well on pace to beat the best month so far this year! It is clearly a time to buy a car! It would seem that the recent decision to keep the bank of Canada rate stagnant has had a major impact on car loan applications. Any increase in the prime lending rate can have a major impact on your monthly payment. Here's an example:
$20,000 financed at 8% for 48 months = $488.26/month
But a 1% increase in the rate has a big impact on payment:
$10000 financed at 9% for 48 months = $497.70/month
That's $9.44 a month X 48 months = $453.12
Based upon your credit score, your base rate could be 1%, 2% 3.75% higher than the base rate. Therefore, getting a loan when the rates are low is the best course of action. If rates are expected to rise, my advice would be to act now, get pre-approved and shop!
