The Canadian Automobile Dealers Association says the Bank of Canada’s cut to the overnight lending rate is good news for the auto retail industry.
“Today’s Bank of Canada rate cut … is a very positive signal for automotive consumers as it is the first rate cut in four years,” CADA President Tim Reuss said in an email to Automotive News Canada. “The fact that the interest rate easing is accompanied by higher new vehicle inventories at dealerships is a strong signal that now is an excellent time for consumers to step into the market.”
“This is bolstering consumer mentality,” Karwel said. “People are thinking of mortgages too. It eases some financial pressure because a quarter point on a $300,000 mortgage makes a big difference.”After keeping interest rates at a more than two-decade high of five per cent for almost a year, the BoC said the indicators for underlying inflation looked increasingly positive.
The Canadian dollar pared its early gains and weakened by 0.4 per cent to 1.3733 to the U.S. dollar, or 72.98 U.S. cents after the decision.