Vehicle financing will be more affordable with interest rate cut, industry experts say

The Bank of Canada raised the key interest rate from 0.50 in March 2022 to a peak of five per cent in July 2023.

But the bank cut has now cut its rate for the first time in more than four years from 5 per cent to 4.75 per cent.

“It sounds small but actually, at the end of the day, it’s going to be quite large,” Klein told CHAT News.

Warren Klein, who owns a Medicine Hat dealership, says a small cut can make a large difference. Ross Lavigne/CHAT News

“Everybody’s been feeling the pinch and any kind of relief right now is welcome news.”

Tim Reuss, president of the Canadian Automobile Dealers Association, said the Bank of Canada’s overnight lending rate reduction was “a very positive signal for automotive consumers.”

Robert Karwel, senior manager of J.D. Power Canada’s Power Information Network, said in a statement that dealerships shouldn’t expect an immediate rush on new vehicles.

“In key core segments, don’t look for a lot of changes, yet,” Karwel said in reference to the sales of full-size trucks and large SUVs.

“This is only a quarter point. But it helps in the long run.”

— with files from the Canadian Press

by Eli J. Ridder, Jesse Gill

Vehicle financing will be more affordable with interest rate cut, industry experts say

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