“Inflation is stabilizing, and interest rates are starting to reduce, which is good news for many consumers. Unfortunately, rising unemployment has offset some of the positives and is driving increased financial stress,” stated Rebecca Oakes, vice president of Advanced Analytics at Equifax Canada.
Concerns about the credit performance of auto loans grew during Q2 2024. Non-bank auto loan delinquency rates reached a historic high, while bank loan delinquencies hit their highest levels since 2019.
The 90+ day delinquency rate for non-bank auto loans increased by 26.8 percent over the past year to one percent, while bank loan delinquencies rose by 54.1 percent to 1.16 percent.
Oakes observed, “We are seeing many missed payments emerging from consumers who opened new auto loans during 2022, when car prices were particularly high. As car prices decline, these consumers may find themselves with high loan amounts and less equity in their vehicles, which could lead to an increased risk of loan defaults.”
The report highlighted a shift towards multigenerational living in Canadian households, driven by economic challenges and evolving immigration patterns. A growing number of young Canadians are choosing to live with their parents and grandparents, reshaping traditional family structures.