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

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

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.

 

Contributing editor, stats guy.

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

img

Samantha

Related posts

Making the big move: pros and condos

Making the big move: pros and condos Shared dining areas and party kitchens in condos...

Continue reading
by Samantha

Facebook Launches New Tool for Real Estate Ads

Facebook Launches New Tool for Real Estate Ads Facebook Inc is getting...

Continue reading
by Samantha

Vancouver real estate market unfazed by foreign buyers’ tax one year later

Vancouver real estate market unfazed by foreign buyers' tax one year later 'As far as...

Continue reading
by Samantha

Join The Discussion