Canadian consumers continue to take on more debt to take delivery of the vehicle they want.
According to TransUnion’s Canada Industry Insights Report released this week, the average outstanding balance on a contract rose during the second quarter by 2.57 percent year-over-year, leaving the figure at $19,087.
While that average outstanding balance grew, TransUnion noticed serious delinquencies didn’t spike during Q2. The report pinpointed serious delinquency in the auto finance space — where payments are 60 days or more past due — at 1.80 percent, representing a rise of just 9 basis points from a year earlier.
As of Q2, TransUnion determined more than 27 million Canadian consumers had access to credit. Approximately 26 million consumers had access to revolving credit such as a credit card, while 8.8 million had a non-revolving loan such as a mortgage or auto loan.
“With the macroeconomic backdrop of a growing economy, low unemployment and strong consumer confidence, we observed robust growth in installment and auto loans,” said Matt Fabian, director of research and industry analysis for TransUnion Canada.
“At the same time, credit card volumes show signs of continued saturation and lines of credit remain relatively stagnant, albeit with potential opportunities for lenders in specific markets,” Fabian continued.