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 of a car in Canada 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 2019, that cost has risen to $37,577. That’s an over three per cent increase from 2017, marking one of the most significant years in transaction price growth since 2013.
KBB credits this change to a growth in sales of Tesla’s Model 3, noting that once you take Tesla out of the equation, the growth rate is somewhere around 2.5% instead.
When you look at the individual vehicle categories, the price has shifted slightly. The cost of an average full-size truck increased by 2.6 per cent in 2019, which is $1,255 more than it was in December 2017. If we’re talking mid-size cars, they averaged $25,838, down just 0.5 per cent.
So, what’s the case for us having to pay for more expensive new and used vehicles?
There are 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 critical factor, of course, is inflation, which is hard to avoid.
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 for many customers. Don’t believe it? Well, in 2018, more than double the amount of used cars were sold than new.
If purchasing either new or used are both options that put stress on your bank account, here are 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.