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Car loan statistics
How much are Canadians paying for car loans?
Buying a new car is a major expense for most people, with Canadians shelling out between $300 and $600 on car payments every month. In fact, as of the beginning of 2021, the median retail price for a new vehicle sat at $38,355, with used vehicles coming in at roughly half that ($19,888), according to data compiled in the Auto Trader price index.
How much does Canada owe?
As of April 2021, Canada owes roughly $3.59 billion in auto loans, according to Statistics Canada. Since July 2016, Canada has owed on average $2.8 billion per year hitting a maximum only a year ago, with lenders advancing $4.1 billion in July of 2020, with a low of $1 billion in April that same year.
Delinquency rates of auto loans
After hitting almost 1% in the first half of 2020, delinquency rates on auto loans in Canada are down at 0.76%, according to the TransUnion Industry Insights Summary. This means that delinquency rates fell 7.21% quarter-on-quarter and a whopping 20.88% year-on-year.
This drop in delinquencies could be explained by some major car companies like Hyundai offering temporary deferrals on car loans, along with some major banks allowing consumers to defer loans for a short time frame, with big banks like TD and BMO including auto loan deferrals as part of their COVID-19 short term relief programs.
An even bigger reason delinquency rates would be down is that the average Canadian’s savings rate jumped from 1.3% of disposable income in 2019 to 14.9% in 2020, leaving far fewer people behind on payments of all kinds.
How much is the average car payment in Canada?
As stated above, the average Canadian pays somewhere around $300 to $600. This is due to a number of factors that influence how much you’re going to pay for your auto loan from the price of the car to the interest rate and loan term.
This means a 7 year loan of $40,055 at an interest rate of 4.27% would result in a $624.32, which would mean you will have paid out $7,180.79 of interest over the 7 year term. The same loan amount and interest rate paid over a 3 year term would lower your interest paid to $3,041.29, saving you a whopping $4,139.50 in interest over the life of the car loan.
What is the average car loan interest rate?
Over that same period of time, the average interest rate for someone getting an auto loan in Canada is 4.51%, with people getting finance for as little as 3.71% in August of 2016 to its peak of 5.39% in January of 2019.
How do Canadians apply for car loans?
It may come as little surprise but Canadians are most likely to apply for a loan when they’re at the dealership buying a vehicle, with 66% saying this is how they got financing, according to a 2018 Statista survey. Other popular methods included taking advantage of loan incentives and/or special financing (18%) or seeing a bank or lending institution to apply for a loan (15%).
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