TORONTO, ONTARIO--(Marketwired - March 6, 2014) - Equifax Canada predicts continued growth in the auto sector on both sides of the border based on the strengthening global economy, continuing low interest rates, potential for more manufacturer incentives, and increased consumer confidence.
"Auto loan inquiries and debt continue to increase, continuing along the record setting pace of 2013," explained George Staikos, the commercial sales and automotive segment leader for Equifax Canada. "It's a clear indication that Canadians are buying cars at a record pace and we see no signs of that slowing down in 2014."
Sales of Canadian passenger vehicles increased by 4 per cent last year and reached a record 1.74 million units, exceeding the previous mark set in 2002. In 2014, industry experts project a new record sales number between 1.76 and 1.78 million new vehicle sales.
By contrast in the U.S., new unit sales continue to grow but current volume is still approximately 10% below the pre-recession peak. Total U.S. new sales in 2013 were 15.5 million units, up more than 1 million from the previous year and more than 5 million units from the recession low in 2009. However, most forecasts of new car and light truck sales for 2014 project a record year ranging between 16.0 and 16.7 million units.
When compared to the same quarter last year (Q4 2013 versus Q4 2012), demand in auto credit increased by 9 per cent, mainly driven by Western Canada and Ontario. While some of the increase is attributed to growth in lease financing, the main catalyst continues to be the widespread availability of long term financing (72+ months) with relatively low interest rates and record low delinquency and charge-off rates.
"While the auto sector is still active and showing great financial potential, the increase in lease financing is of interest," adds Staikos. "It is a sign that captive financial arms of the manufacturers are willing to combat the attractive low payment terms of longer term loan financing offered by financial institutions."
Delinquency rates and average bankruptcy balances for the auto sector continue to be at their lowest levels.
Equifax is a global leader in consumer and commercial information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 600 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or have investments in 19 countries and is a member of the Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange under the symbol EFX.
For more information, please visit www.equifax.ca.