Canadians love luxury cars, as banks love increasing debts

Article by Christian A., 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

Recommended

The long awaited 2018 Buick Regal GS has finally been revealed by the company, following several leaked photos and information in the past few months. The thing is, if you’ve...
by - July 20, 2017
Earlier this month, we learned that France has made moves to ban diesel and gasoline fueled cars by stopping them from entering the city. More than that, they plan to...
by - July 19, 2017
The new 2018 Rolls-Royce Phantom VIII is on the way, but still, all we had been seeing are camouflaged prototypes of the eight generation of this iconic nameplate. Fortunately though,...
by - July 19, 2017
Would you have ever imagined a Mercedes-Benz developing an upscale pickup? We first saw this last October as a concept car and now, the production model of the Mercedes-Benz X-Class...
by - July 19, 2017
Haven’t you ever wondered how Ferrari’s names and numbers were actually derived? As it is Ferrari’s 70th year in the industry, we believe that it’s only fair that we shed...
by - July 18, 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