Today's Chart comes from J.D. Power, showing the growth of long term loans in the Canadian car market. While 96 month loans are just starting to hit American consumers, the 8 year loan terms have been present in the Great White North for some time. A friend was recently looking at a modestly equipped Big Three Pickup, which would be used for work. The truck, with an MSRP of $35,000 CAD (plus 13 percent sales tax), was offered at 96 months for 3.99%. That would have added up to $6,000 in interest payments over the loan term.
Faced with less disposable income and higher vehicle costs, the discourse in the Canadian market has gradually shifted to one where bi-weekly and even weekly payments have become the advertised norm, with 72, 84 and 96 month loans appearing as a fixture of the new and used vehicle marketplace. While the Honda Civic is still Canada's best-selling passenger car (advertised at $39 per week), and Canadians opt for more modest choices overall, credit rating agencies are already sounding the alarm over the rapid expansion of auto loans to unworthy consumers, driven largely by Canada's banking sector.
The post Chart Of The Day: 8 Years A Slave appeared first on The Truth About Cars.
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