Of COVID and Car Loans: Part I - Interest

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It’s amazing how much can change in just a week. Everyone here at Car Loans Canada wishes you and your family all the best during this difficult time and hope that you’re taking the recommended precautions to avoid exposure to COVID-19. Nothing is more precious than your health, and we hope that you continue to enjoy it through this pandemic and beyond.

Car Loans Canada has created a division dedicated to helping people during the pandemic. Over the next few days, we’re going to cover some of the biggest impacts that COVID-19 has had on the lending and automotive industries, how they could affect you, and how our new division can help. First up: lending and interest rates.

Lower Interest Rates

As you may know, the Bank of Canada has just lowered interest rates to a new low of point seven-five percent. The major Canadian banks (BMO, CIBC, Desjardins, RBC, Scotiabank, and TD) have responded in kind, cutting their prime lending rates down to two point nine-five percent. It’s described as a "proactive measure taken in light of the negative shocks to Canada's economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices.”

How will this affect you?

The intent behind the low rates is to limit the spillover from social distancing and business closures onto the wider economy. The lower rates will (hopefully) encourage people like you to continue borrowing money and making big purchases. Basically, the banks and the government intend to create the kind of climate in which you want to buy a new car.

Although it’s certainly not the priority at a time like this, you’re set to save some money if you’re interested in buying a new car through an auto loan or refinancing an existing one. If you’ve recently been rejected for financing, the lowered rates may also mean that you may now qualify (more on that later in the week).

Even manufacturers are following suit, with GM now offering zero-interest loans for up to eighty-four months for customers in top credit tiers. They’re also making an effort to anticipate financial struggles on the part of their current borrowers, giving them the option to delay payments during the pandemic.

We’re Here For You

No matter how long the COVID-19 outbreak lasts, Car Loans Canada will continue working for you. Stay tuned to our blog over the coming days for more coverage on the effect of the pandemic on our industry. We wish you and yours good health in the meantime.