Canadians love luxury cars, as banks love increasing debts

Article by Christian Andrei, on February 14, 2013

While Canadians have been staying away from too much housing debt, sales of Porsche and BMW have been increasing. According to DesRosiers Automotive Consultants Inc.’s data that Bloomberg gathered, Mercedes-Benz sales have grown by 168% since 2004 to 33,116 units last year. On the other hand, Porsche SE sales have climbed 65%. Sales of BMW 3 Series sales surpassed the figures for the Accord last year as luxury automakers attempted to attract Canadians by expanding the offerings and putting the prices of several models nearer to traditional family cars.

Since 2007, the lending of Canada's major banks to car buyers has more than tripled the year before the global credit crisis. Automakers have been increasing their dealer financing. The demand for cars may weaken the Bank of Canada's prediction that consumer debt will stabilize around a record 165% of disposable income.

This is a reason that policy makers mentioned last month for postponing plans to increase interest rates. Tom Higgins, Burlington, Ontario-based vice president of analytics and decision services at credit-reporting company TransUnion Corp., said that Canadians are turning more confident and appear to be more willing to raise the debt level at a quicker rate. He said that this situation is a “little bit disconcerting” from that perspective considering all the information and warnings that the Bank of Canada and the finance minister have given.

Canada’s economy was able to recover from the worldwide financial crisis quicker than the other Group of Seven members. In fact, not one of its banks had been unsuccessful or needed additional public capital. Canadian officials are worried that too much borrowing may disrupt the No. 11 biggest economy in the world if consumers can’t repay their debts. Consumer debt levels are already higher compared to the U.S. and United Kingdom as Carney has maintained its policy interest rate at 1% since 2010.

Topics: canada, luxury car

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

The Shooting Brake is probably the least rendered body shape in the automotive world. But it’s also the most sought after design among car nuts for its unique, old-fashioned charm....
by - January 23, 2017
Perhaps to make the upcoming Valentine’s day more special, Tinder dating app and Ford UK have cooked up a special blind date for all the single blokes and chicks in...
by - January 23, 2017
2017 is undeniably a very busy year for BMW. After introducing the new 4-Series, the German automaker has just released several new updates. In relation to this, BMW is also...
by - January 23, 2017
The renowned Shelby Super Snake is now 50 years old! As we greet the Super Snake a “happy birthday” or a “happy anniversary,” Shelby itself is celebrating half a century...
by - January 23, 2017
Nearly a year after the Subaru XV Concept was unveiled at the 2016 Geneva Motor Show in Switzerland, this SUV study is making its North American debut at the 2017...
by - January 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries