Nam Kular

Categories: Uncategorized

Canadians Are Buying A Record Number Of New Cars, With A Record Amount Of Financing

Canadians aren’t just buying real estate, they’re also treating themselves to new cars. According to a new release from Statistics Canada, sales of new cars reached a record high for February. Great for automobile manufacturers, but not so great for the economy. Debt-fuelled financing makes this more of a warning sign than a boom-time trend.

New Vehicle Sales In Canada Reach Record Highs

Sales of new motor vehicles across Canada rose to an all-time record for February. The month saw 125,284 sales – a 2.74% increase from the same time last year. The largest segment of sales were seen in Ontario, where 41% of them occurred. This is up slightly from 2016, where Ontario accounted for 39% of sales. Booming real estate prices, and massive numbers for car sales… Ontario better be facing the greatest economy its ever experienced, or it’s in trouble.

New Vehicles Sold

Month	Sales
Jan 1990	91,288
Feb 1990	88,583
Mar 1990	139,653
Apr 1990	134,243
May 1990	148,056
Jun 1990	136,787
Jul 1990	110,807
Aug 1990	109,046
Sep 1990	93,393
Oct 1990	106,023
Nov 1990	89,011
Dec 1990	70,979
Jan 1991	83,716
Feb 1991	81,299
Mar 1991	109,716
Apr 1991	139,820
May 1991	146,960
Jun 1991	141,662
Jul 1991	123,736
Aug 1991	98,964
Sep 1991	103,787
Oct 1991	95,686
Nov 1991	88,967
Dec 1991	73,477
Jan 1992	79,512
Feb 1992	82,293
Mar 1992	110,160
Apr 1992	124,848
May 1992	125,257
Jun 1992	125,177
Jul 1992	110,326
Aug 1992	97,489
Sep 1992	103,782
Oct 1992	96,567
Nov 1992	88,063
Dec 1992	83,945
Jan 1993	68,290
Feb 1993	68,765
Mar 1993	113,520
Apr 1993	123,786
May 1993	128,404
Jun 1993	119,001
Jul 1993	107,933
Aug 1993	96,017
Sep 1993	94,832
Oct 1993	95,386
Nov 1993	94,665
Dec 1993	82,335
Jan 1994	76,528
Feb 1994	81,981
Mar 1994	123,663
Apr 1994	125,672
May 1994	135,452
Jun 1994	134,896
Jul 1994	102,422
Aug 1994	93,723
Sep 1994	100,080
Oct 1994	103,460
Nov 1994	97,197
Dec 1994	84,982
Jan 1995	74,721
Feb 1995	76,964
Mar 1995	109,830
Apr 1995	102,986
May 1995	125,381
Jun 1995	122,535
Jul 1995	93,041
Aug 1995	98,953
Sep 1995	100,351
Oct 1995	94,070
Nov 1995	87,890
Dec 1995	79,813
Jan 1996	73,765
Feb 1996	81,180
Mar 1996	105,370
Apr 1996	104,783
May 1996	125,989
Jun 1996	122,206
Jul 1996	100,108
Aug 1996	94,134
Sep 1996	95,276
Oct 1996	108,552
Nov 1996	97,327
Dec 1996	95,867
Jan 1997	80,002
Feb 1997	89,210
Mar 1997	123,276
Apr 1997	135,184
May 1997	147,753
Jun 1997	136,006
Jul 1997	121,096
Aug 1997	111,157
Sep 1997	113,716
Oct 1997	118,395
Nov 1997	112,385
Dec 1997	136,200
Jan 1998	77,409
Feb 1998	86,860
Mar 1998	131,463
Apr 1998	140,547
May 1998	158,144
Jun 1998	152,505
Jul 1998	120,549
Aug 1998	110,404
Sep 1998	126,952
Oct 1998	109,398
Nov 1998	106,440
Dec 1998	108,261
Jan 1999	86,790
Feb 1999	90,913
Mar 1999	144,526
Apr 1999	142,870
May 1999	153,101
Jun 1999	156,553
Jul 1999	130,047
Aug 1999	125,410
Sep 1999	136,298
Oct 1999	120,347
Nov 1999	122,625
Dec 1999	132,561
Jan 2000	94,001
Feb 2000	98,810
Mar 2000	155,496
Apr 2000	147,619
May 2000	167,225
Jun 2000	160,649
Jul 2000	128,960
Aug 2000	141,733
Sep 2000	146,361
Oct 2000	112,936
Nov 2000	117,609
Dec 2000	116,162
Jan 2001	96,791
Feb 2001	89,159
Mar 2001	143,189
Apr 2001	150,179
May 2001	169,058
Jun 2001	161,079
Jul 2001	130,499
Aug 2001	139,030
Sep 2001	127,045
Oct 2001	124,217
Nov 2001	131,917
Dec 2001	135,801
Jan 2002	112,105
Feb 2002	103,981
Mar 2002	150,286
Apr 2002	167,558
May 2002	186,313
Jun 2002	168,305
Jul 2002	141,101
Aug 2002	150,865
Sep 2002	144,297
Oct 2002	137,951
Nov 2002	127,244
Dec 2002	143,312
Jan 2003	95,477
Feb 2003	105,391
Mar 2003	148,922
Apr 2003	152,967
May 2003	185,419
Jun 2003	149,816
Jul 2003	148,957
Aug 2003	145,108
Sep 2003	141,988
Oct 2003	124,427
Nov 2003	115,126
Dec 2003	112,870
Jan 2004	85,238
Feb 2004	94,777
Mar 2004	149,605
Apr 2004	160,195
May 2004	166,136
Jun 2004	154,134
Jul 2004	136,563
Aug 2004	136,187
Sep 2004	130,699
Oct 2004	123,552
Nov 2004	120,287
Dec 2004	117,822
Jan 2005	82,019
Feb 2005	106,064
Mar 2005	148,296
Apr 2005	167,441
May 2005	161,865
Jun 2005	166,024
Jul 2005	158,796
Aug 2005	146,862
Sep 2005	128,431
Oct 2005	118,993
Nov 2005	124,111
Dec 2005	121,408
Jan 2006	89,422
Feb 2006	100,740
Mar 2006	155,990
Apr 2006	159,436
May 2006	173,291
Jun 2006	162,029
Jul 2006	145,521
Aug 2006	157,868
Sep 2006	140,065
Oct 2006	123,076
Nov 2006	127,732
Dec 2006	131,157
Jan 2007	94,413
Feb 2007	99,877
Mar 2007	154,450
Apr 2007	172,428
May 2007	189,076
Jun 2007	172,487
Jul 2007	145,370
Aug 2007	160,883
Sep 2007	134,516
Oct 2007	124,072
Nov 2007	120,012
Dec 2007	122,954
Jan 2008	105,546
Feb 2008	113,877
Mar 2008	153,505
Apr 2008	179,289
May 2008	188,137
Jun 2008	163,064
Jul 2008	152,704
Aug 2008	149,607
Sep 2008	137,479
Oct 2008	126,064
Nov 2008	107,709
Dec 2008	97,164
Jan 2009	78,817
Feb 2009	82,039
Mar 2009	129,831
Apr 2009	146,026
May 2009	156,025
Jun 2009	140,442
Jul 2009	141,621
Aug 2009	136,971
Sep 2009	131,275
Oct 2009	123,607
Nov 2009	104,589
Dec 2009	113,613
Jan 2010	83,512
Feb 2010	101,788
Mar 2010	148,052
Apr 2010	152,187
May 2010	157,082
Jun 2010	156,891
Jul 2010	150,800
Aug 2010	138,210
Sep 2010	137,349
Oct 2010	125,731
Nov 2010	118,521
Dec 2010	114,376
Jan 2011	86,320
Feb 2011	98,147
Mar 2011	156,452
Apr 2011	162,613
May 2011	152,064
Jun 2011	168,119
Jul 2011	144,171
Aug 2011	143,653
Sep 2011	137,660
Oct 2011	129,049
Nov 2011	124,466
Dec 2011	117,863
Jan 2012	100,448
Feb 2012	109,817
Mar 2012	161,688
Apr 2012	161,372
May 2012	180,368
Jun 2012	173,190
Jul 2012	151,451
Aug 2012	152,577
Sep 2012	146,270
Oct 2012	138,892
Nov 2012	128,849
Dec 2012	111,881
Jan 2013	97,872
Feb 2013	105,811
Mar 2013	159,953
Apr 2013	175,181
May 2013	189,030
Jun 2013	174,439
Jul 2013	161,835
Aug 2013	161,371
Sep 2013	151,644
Oct 2013	148,181
Nov 2013	135,776
Dec 2013	115,368
Jan 2014	97,624
Feb 2014	107,501
Mar 2014	160,655
Apr 2014	182,239
May 2014	199,568
Jun 2014	179,556
Jul 2014	180,682
Aug 2014	174,757
Sep 2014	172,069
Oct 2014	159,144
Nov 2014	141,763
Dec 2014	134,829
Jan 2015	101,597
Feb 2015	111,933
Mar 2015	164,402
Apr 2015	192,647
May 2015	201,603
Jun 2015	181,780
Jul 2015	181,324
Aug 2015	178,591
Sep 2015	178,738
Oct 2015	166,521
Nov 2015	148,163
Dec 2015	132,218
Jan 2016	110,686
Feb 2016	121,933
Mar 2016	178,227
Apr 2016	203,557
May 2016	198,425
Jun 2016	193,818
Jul 2016	175,846
Aug 2016	174,976
Sep 2016	177,191
Oct 2016	157,414
Nov 2016	163,320
Dec 2016	128,352
Jan 2017	112,996
Feb 2017	125,284

Source: Statistics Canada.

Average Sale Price For New Vehicles Rises

Consumers are purchasing more expensive vehicles too. Over $5 billion was spent on new vehicles for the month, bringing the average to $40,100 – up 3.4% from the same time last year. Ontario was below the average for the country, where the average price was $39,400. While prices are lower in Ontario, they’re not exactly budget vehicles either.

Average Sale Price For New Vehicles

Month	Average Price
Jan 1990	18,807
Feb 1990	19,059
Mar 1990	18,829
Apr 1990	18,988
May 1990	18,655
Jun 1990	18,680
Jul 1990	18,654
Aug 1990	18,480
Sep 1990	18,712
Oct 1990	19,142
Nov 1990	19,333
Dec 1990	19,836
Jan 1991	17,181
Feb 1991	17,614
Mar 1991	17,451
Apr 1991	17,586
May 1991	17,385
Jun 1991	17,719
Jul 1991	17,557
Aug 1991	17,329
Sep 1991	17,633
Oct 1991	18,382
Nov 1991	18,567
Dec 1991	19,305
Jan 1992	18,907
Feb 1992	19,163
Mar 1992	18,972
Apr 1992	19,044
May 1992	18,770
Jun 1992	18,796
Jul 1992	18,809
Aug 1992	19,175
Sep 1992	19,237
Oct 1992	19,384
Nov 1992	19,780
Dec 1992	19,989
Jan 1993	19,946
Feb 1993	20,280
Mar 1993	20,337
Apr 1993	20,081
May 1993	20,116
Jun 1993	20,286
Jul 1993	20,250
Aug 1993	20,479
Sep 1993	20,696
Oct 1993	21,402
Nov 1993	21,749
Dec 1993	22,680
Jan 1994	21,532
Feb 1994	21,311
Mar 1994	21,358
Apr 1994	21,837
May 1994	21,664
Jun 1994	21,691
Jul 1994	22,023
Aug 1994	22,374
Sep 1994	22,496
Oct 1994	22,977
Nov 1994	23,276
Dec 1994	23,644
Jan 1995	23,701
Feb 1995	24,294
Mar 1995	24,309
Apr 1995	24,064
May 1995	23,962
Jun 1995	23,735
Jul 1995	23,776
Aug 1995	23,799
Sep 1995	23,881
Oct 1995	24,449
Nov 1995	24,794
Dec 1995	25,366
Jan 1996	25,720
Feb 1996	25,803
Mar 1996	26,144
Apr 1996	25,935
May 1996	25,702
Jun 1996	25,714
Jul 1996	25,915
Aug 1996	25,403
Sep 1996	25,983
Oct 1996	26,668
Nov 1996	26,925
Dec 1996	27,794
Jan 1997	26,895
Feb 1997	27,534
Mar 1997	27,116
Apr 1997	26,903
May 1997	26,731
Jun 1997	26,952
Jul 1997	26,932
Aug 1997	26,942
Sep 1997	27,387
Oct 1997	28,480
Nov 1997	28,489
Dec 1997	28,190
Jan 1998	28,153
Feb 1998	28,045
Mar 1998	27,359
Apr 1998	27,753
May 1998	27,579
Jun 1998	27,431
Jul 1998	27,587
Aug 1998	27,696
Sep 1998	28,117
Oct 1998	29,440
Nov 1998	29,625
Dec 1998	30,219
Jan 1999	29,585
Feb 1999	29,936
Mar 1999	29,358
Apr 1999	29,019
May 1999	28,353
Jun 1999	28,479
Jul 1999	28,488
Aug 1999	29,124
Sep 1999	29,828
Oct 1999	30,280
Nov 1999	30,190
Dec 1999	30,713
Jan 2000	30,252
Feb 2000	30,513
Mar 2000	29,789
Apr 2000	29,600
May 2000	29,364
Jun 2000	29,400
Jul 2000	28,664
Aug 2000	29,037
Sep 2000	29,165
Oct 2000	30,005
Nov 2000	29,989
Dec 2000	29,618
Jan 2001	29,540
Feb 2001	29,807
Mar 2001	29,552
Apr 2001	29,176
May 2001	28,713
Jun 2001	29,135
Jul 2001	28,738
Aug 2001	28,732
Sep 2001	29,257
Oct 2001	29,768
Nov 2001	29,922
Dec 2001	30,209
Jan 2002	30,437
Feb 2002	30,525
Mar 2002	29,972
Apr 2002	29,514
May 2002	29,325
Jun 2002	29,910
Jul 2002	29,734
Aug 2002	29,946
Sep 2002	30,230
Oct 2002	30,731
Nov 2002	31,193
Dec 2002	30,773
Jan 2003	30,812
Feb 2003	31,086
Mar 2003	31,021
Apr 2003	30,542
May 2003	29,940
Jun 2003	30,682
Jul 2003	30,683
Aug 2003	30,686
Sep 2003	31,603
Oct 2003	32,120
Nov 2003	31,953
Dec 2003	32,339
Jan 2004	31,813
Feb 2004	31,710
Mar 2004	31,243
Apr 2004	30,523
May 2004	30,276
Jun 2004	31,223
Jul 2004	31,169
Aug 2004	31,190
Sep 2004	32,167
Oct 2004	32,472
Nov 2004	32,746
Dec 2004	32,732
Jan 2005	32,765
Feb 2005	32,823
Mar 2005	32,035
Apr 2005	31,575
May 2005	31,769
Jun 2005	32,078
Jul 2005	31,373
Aug 2005	31,572
Sep 2005	31,986
Oct 2005	32,134
Nov 2005	32,847
Dec 2005	33,027
Jan 2006	32,918
Feb 2006	32,915
Mar 2006	32,328
Apr 2006	31,660
May 2006	31,771
Jun 2006	32,032
Jul 2006	31,564
Aug 2006	31,692
Sep 2006	32,498
Oct 2006	33,455
Nov 2006	33,123
Dec 2006	33,730
Jan 2007	33,191
Feb 2007	33,198
Mar 2007	32,446
Apr 2007	31,240
May 2007	30,963
Jun 2007	31,007
Jul 2007	30,763
Aug 2007	30,496
Sep 2007	31,169
Oct 2007	32,151
Nov 2007	32,559
Dec 2007	33,831
Jan 2008	32,084
Feb 2008	31,264
Mar 2008	31,111
Apr 2008	30,690
May 2008	29,678
Jun 2008	30,269
Jul 2008	30,149
Aug 2008	29,976
Sep 2008	30,523
Oct 2008	31,379
Nov 2008	31,499
Dec 2008	32,813
Jan 2009	31,394
Feb 2009	31,149
Mar 2009	30,991
Apr 2009	30,229
May 2009	30,924
Jun 2009	31,767
Jul 2009	30,873
Aug 2009	31,871
Sep 2009	31,739
Oct 2009	32,658
Nov 2009	32,864
Dec 2009	33,495
Jan 2010	33,943
Feb 2010	32,491
Mar 2010	32,539
Apr 2010	32,688
May 2010	31,768
Jun 2010	32,445
Jul 2010	32,182
Aug 2010	32,717
Sep 2010	33,126
Oct 2010	33,539
Nov 2010	34,209
Dec 2010	35,891
Jan 2011	34,359
Feb 2011	34,227
Mar 2011	32,977
Apr 2011	32,749
May 2011	33,218
Jun 2011	32,963
Jul 2011	32,556
Aug 2011	33,282
Sep 2011	33,917
Oct 2011	34,383
Nov 2011	33,487
Dec 2011	33,721
Jan 2012	33,334
Feb 2012	33,502
Mar 2012	33,379
Apr 2012	32,668
May 2012	32,765
Jun 2012	32,874
Jul 2012	32,831
Aug 2012	32,827
Sep 2012	33,013
Oct 2012	33,394
Nov 2012	33,616
Dec 2012	34,555
Jan 2013	34,915
Feb 2013	34,429
Mar 2013	34,050
Apr 2013	34,204
May 2013	33,615
Jun 2013	33,857
Jul 2013	33,613
Aug 2013	33,582
Sep 2013	34,373
Oct 2013	34,927
Nov 2013	34,754
Dec 2013	36,117
Jan 2014	35,458
Feb 2014	35,153
Mar 2014	35,373
Apr 2014	34,454
May 2014	34,499
Jun 2014	34,902
Jul 2014	34,741
Aug 2014	34,455
Sep 2014	35,422
Oct 2014	35,699
Nov 2014	35,798
Dec 2014	37,154
Jan 2015	36,712
Feb 2015	36,791
Mar 2015	36,298
Apr 2015	35,873
May 2015	35,661
Jun 2015	36,680
Jul 2015	35,915
Aug 2015	35,891
Sep 2015	36,761
Oct 2015	36,537
Nov 2015	36,979
Dec 2015	38,770
Jan 2016	38,807
Feb 2016	38,780
Mar 2016	37,845
Apr 2016	37,190
May 2016	37,192
Jun 2016	37,450
Jul 2016	37,842
Aug 2016	38,243
Sep 2016	39,179
Oct 2016	38,891
Nov 2016	39,601
Dec 2016	41,050
Jan 2017	40,137
Feb 2017	40,100

Source: Statistics Canada.

Consumers Are Buying “More Car Than They Can Afford”

The uptick in average sale price is due to longer financing terms for buyers. According to the Financial Consumer Agency of Canada (FCAC), Canadians are “increasingly purchasing more car that they can afford,” due to longer financing becoming fashionable. The agency notes that average leases have crept up 2 months, every year since 2010. According to the Bank of Canada (BoC), the average loan was 74 months as of 2015. Longer terms bring down monthly payments, but increases the total cost of the loan.

The Rise Of Non-Prime Lending In The Auto Industry

The right to debt seems to be a topic all Canadians are embracing, and the auto sector is no different. The BoC has estimated that 25% of borrowers are non-prime, which incase you didn’t know is Canadian-English for “sub-prime.” These buyers generally have a FICO score below 670, and face predatory loans with up to 25% interest. This makes it difficult to build positive equity on car loans.

The boom of vehicle sales should be an indicator of a healthy economy, but is actually a drag due to the dependence on credit. Increasingly Canadian consumers are turning to sub-prime borrowing to meet their financial needs. The immediate boost is nothing compared to the problems created. More long term debt means a greater percentage of income devoted to debt-service.

Daniel Wong

Contributing editor, stats guy.