Canadians struggle with car loans

Unfortunately, a significant number of Canadians are facing serious financial challenges. The reasons for these difficulties include a shortage of automobiles and an increase in loan interest rates. The Central Bank of Canada has reported in its recent monetary policy update that the amount of outstanding loans for vehicles has exceeded pre-pandemic levels. Shari Prymak, the CEO of Car Help Canada, emphasized in an interview with Global News that the shortage of automobiles in recent years has led to a up to 40% increase in the prices of both new and used cars. Additionally, the interest rates for car loans and leasing have risen in line with the main interest rate set by the Central Bank of Canada.
She added, "Currently, purchasing a car has become more expensive than ever, and many consumers are burdened with substantial debt." Authorities have also acknowledged that many individuals have been forced to postpone their mortgage payments, credit card payments, and car loan payments. Given the ongoing supply chain issues and major strikes by manufacturers, it doesn't seem likely that car prices will decrease in the near future. This is because, in the face of a shortage of new cars, prices continue to remain high.

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