The insanely low gas prices seemed like a miracle to everybody this winter, however the gift continues far beyond the gas station. What many drivers don’t realize is that the price of gas, the cost of a new car and the deals you receive with it actually go hand in hand.
Since the price of gas was so low car drivers everywhere are saving on gallons a day, which means they have more money saved to invest in a new car. Car dealerships and makers receive more money per purchase due to the bigger budget, which usually means a bigger and more expensive car and invest that money in better deals, lower discounts and larger incentives on future purchases.
Of course dealers and carmakers do not always put every penny of their new-found riches into the deal-making side of the business. They also look to book healthier profits.
But with more money sloshing around in the system, notes auto analyst Dennis DesRosiers of DesRosiers Automotive Consultants, it is fair to expect a new wave of offers and enticements in the Canadian light vehicle marketplace. We are seeing this now.
There’s more to this story, too. Lower pump prices are acting as an economic windfall for the average car owner. DesRosiers estimates that the typical Canadian uses about 1,820 liter18s of fuel a year. A 30-cent drop at the pump puts $546 into the pocket of every driver – and nation-wide amounts to a $13 billion economic stimulus.
What we have here is a country of enriched drivers being chased by an army of dealers and manufacturers with more money to spend on incentives.