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© MB MONEY MATTERS -THE AVERAGE PRICE OF A NEW VEHICLE SHOT UP BY 21% IN A YEAR < DHRITI GUPTA 3 dgupta@thestar.ca g Ff Despite inventory be- = ingonthe path t to recovery ' Ply-chain oe Canad. = ans looking to buy a new 3 car shouldn't expect much relief in the auto market, with high interest rates the latest hurdle for buy- ers looking to finance a new vehicle. As of June, the average price of a new vehicle in- creased by 21 per cent year-over-year, toa record high of $66,288, according to the latest quarterly price index from AutoTra- ler.ca. "As the Bank of Canada has gradually raised its key rate over the past year and a half, interest rates for financing and leasing cars have also gone up fe a bit," said Shari tor of Car Help Canada. “It's made the cost of: loans onanew car was $797 as of June, up 38 per cent from June 2019, according to AutoTrader data. In terms of interest rates on those payments, Prymak said the norm for new cars is high, ranging anywhere from five to sev- en per cent. He added the rate can be higher on used jualified. 're navigating the VILLE expensive auto market and ere are Ww things consumers should keepin mind to avoid costly mistakes. SHORTEN YOUR LOAN TERM “Consumers are paying more and longer for their vehicles at this time," said Baris Akyurek, vice-pres- ident of insights and intel- ligence at AutoTrader. He noted the average loan term in June 2023 was 72 months, compared with 68 months in June 2019. George terms long as years. of you're financing over 84 months, almost a third of what you're paying is fons to interest," he aie eymak said if you're not able to make the pay- ments ona ashort-term loan of three to four years, the vehicle is likely over your ment or looking for a less expensive car. ON THOSE COSTLY EVs... vie canadian econo- is slowin; and i is expected Foy any fur. ther ith high interest rates," aid Rebekah Young, an economist at Scotiabank specializing in the auto industry. During past slowdowns, consum- Public notice of pesticide use ers have tended toward the used -car market as a more Ramon Ferreira/Toronto Star illustration If you're navigating the expensive auto market and looking to purchase, experts say there are few things consumers should keep in mind to avoid costly mistakes. cles are marketed to garner long- -term savings, Prymak he said. The math doesn't really work out that way any- more. "Both new and used cars are now likely to re- quire financing.” With that consic idered, Prymak said now is "cer- tainly not a good time to be shopping for a used car" due to overinflated prices. "In some cases, you're not going to save any money whatsoever," he _ said. “Many lightly used cars cost more or less the same price as just ordering a brand-new one." And while electric vehi- that they can cost $10,000 to $20,000 more than a gas car. "Even after you factor in rebates or in- centives from the govern- ment, there i is a huge price premium to buy an EV," he said, adding that it could take several years to re- coup that money in savings on gas and repair costs. CONSIDER THE COMPACT MARKET ented a lot of value unrecognized in the com- pact segment of the mar- ket," said the Automobile Protection Association's The Town of Oakville intends to control weeds in medians, boulevards and shrub beds along the follow- ing roadsides and parks: Lakeshore Road, Church St, Robinson St, Dunn St, Reynolds St, Navy St, Thomas St, Allan St, Trafalgar Rd, Randall St, Kerr Street, Bronte Rd, East St, Nelson St, Jones St, Marine Dr. Upper Middle Road, Third Line, Dorval Drive, Neyagawa Blvd, Cornwall Rd, Dundas St., Bridge Rd, Rebecca St, within the Town of Oakville Iny. If you can make do with less space, he said deals can be found on com- pact cars and SUVs like the Toyota Corolla or the Hy- na. one segment where car makers weren't able to increase prices quite as much as their oth- er vehicles," Iny said. "That type of vehicle is still avail- able for under $30,000." DON'T EXPECT TO SEE A DROP IN LISTING PRICES Looking back to past economic downturns, ank's Young noted that supply wasn't an issue like ithas been during pandem- oak Using the following pesticide registered under the Pest Control Products Act (Canada): Finalsan Pro Commercial Concentrate (Reg. No. 30012), containing the active ingredient ammonium soap of fatty acids. Applications will occur on an as-needed basis commencing on April 24, 2023 weather permitting, and ending October 6, 2023 For further information contact: Service Oakville at 905-845-6601 Collect calls will be accepted from individ- uals calling long distance. le.ca ic times. In fact, it was the opposite. Dealers had pop- ulated their lots just before people started cutting back on their spending, mean- ing they had to resort to big price drops to get rid of sup- ply. ry this downturn, we don't see that big inventory build up," Young saic While the AutoTrader report shows that new-car inventory is up 41 per cent since last June, it's still not back to pre-pandemic lev- els. Young noted that at some point, interest rates will come back down, re- ducing loan costs. “At Scotiabank we don't think it'll be until mid-year 2024, but at that point we'll see things like the cost of fi- nancing a vehicle start to come down." DRIVING A BARGAIN One place consumers could catch a break as sup- ply recovers is at the ofa ership, according t ited ed" dealer discount said. Instead, dealers start- ed to pad prices with non- negotiable but unneces- sary add-ons like green tire insurance and anti-theft packages. “If the supply situation improves, you can once again go from dealer to dealer and drive a bar- gain,” Iny said. "The car will cost more, but there will be less dirty tricks." insidehalton.com