Over the last few years, the average price of both a new and used vehicle has been steadily increasing across all manufacturers. Though the increase has been small, it does make a difference when it comes to determining what’s considered affordable especially with the average price exceeding most Canadians’ budgets.
Looking back five years, the average price of a new vehicle was $33,500, according to Kelley Blue Book. Now, in 2018, that cost has risen to $36,100. When it comes to the price of a used vehicle, the average price has increased from $16,900 to $19,400 over that same period.
Overall, this increase is fairly small when compared to the seven per cent increase that occurred between 2015 and 2016 — approximately more than $2,137.
Looking at individual vehicle categories, the price has increased slightly. The average truck price inflated by 2.4 per cent at an average of $37,345. Whereas the average passenger cars averaged $25,110, up 0.9 per cent.
So, what’s the case for us having to pay for more expensive new and used vehicles?
Well, there’s several factors to take into account. First, there’s been a growing demand for SUVs and trucks — vehicles that are more expensive than most passenger cars.
There’s also a case to be made for incentive increase, meaning dealerships need to meet a certain quota resulting in less attractive pricing packages for customers. Another key factor of course is inflation, which can’t be avoided.
But don’t let the increased cost of purchasing a new vehicle get you down. Used, less expensive vehicles are becoming a more attractive option to many customers. So much so that in 2018, 40 million used cars, more than double the number of new ones, were sold.
If purchasing either new or used are both options that put stress on your bank account, here’s a few other key factors to help you find a flexible payment plan:
- Consider a co-signer
- Go with a longer loan term
- Negotiate a lower interest rate
- Use our car loan calculator
For more information on budgeting for your new vehicle purchase, check out our other blog posts focused on getting a car loan with less than perfect credit.
- How-To Pay Off a Car Loan Faster
- How-To Get a Truck Loan with Bad Credit
- How-To Get a Car Loan without a Cosigner
- 10 Fast Money Saving Tips for Canadians
At Birchwood Credit Solutions, we look further than your credit score and can approve customers in all types of credit situations, including bankruptcy and divorce. Whether you’re new to Canada and haven’t yet built any credit or have found yourself in a difficult financial situation — we work with you to assess your current situation and approve your auto financing quickly and hassle-free.