Canadian Real Estate News More and more Canadians are extending the amortization on their car loans as a way of qualifying for bigger mortgages, according to a new survey -- suggesting that number will increase as first-time buyers look to move beyond renting.
In fact, more than half of those borrowing to finance their vehicles are already opting for 72-month amortizations or longer, representing a nearly 40-percentage point jump from just five years ago, reads a report from JD Power and Associates.
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Debt-burdened Canadians succumb to lure of long-term car loans
Business News Network (Globe and Mail)
Massive mortgage debt is top of mind for Bank of Canada Governor Mark Carney, but in his quest to curtail Canadians’ borrowing, he might want to start thinking about the vehicles sitting in their driveways and garages, too.
The use of long-term loans to purchase new vehicles is skyrocketing, as car buyers look for ways to cut or hold steady a key component of a family’s spending -- the monthly car payment.
More than half the Canadian car buyers who borrow to finance their vehicle purchases are taking out loans longer than six years, according to new data from J.D. Power and Associates.
That is a huge increase from just five years ago, when 14 percent of buyers borrowed for six years or more, said J.D. Ney, an automotive account analyst in the consulting firm’s Canadian office.
