Canadians continue to have a love affair with their debt, as seen in the automotive industry.
A recent poll conducted by CIBC found the majority (two-thirds) of Canadians are comfortable with their debt level. Nearly 31 per cent of Canadians have even gone deeper into debt in the past year for purchases, including buying a new car.
In fact, a new vehicle was the biggest reason for more than a quarter of Canadians taking on debt in the last year.
The poll found comfort with debt increases with age, which holds true for 81 per cent of consumers aged 65 and over, versus 62 per cent of 18-to-24 year olds in the millennial demographic.
Only 10 per cent of those polled say they are very uncomfortable with their current debt and are feeling financially squeezed.
Even though Canadian household debt remains near record highs, many auto dealers have turned to long amortization periods of up to 96 months in a bid to entice buyers and sell vehicles off their lots. This has caused some anxiety among executives within the auto and finance industry.
There is some good news. In the U.S., new auto loan originations are at record highs, while severe delinquency rates are the lowest they’ve been in a decade, reported credit report agency Equifax.
