Auto Loan Market Thaws Out in Canada, U.S. Could be Next
By Liz Opsitnik Thursday, Jun 25 2009 12:58
An economist from Canada’s Scotiabank said Thursday that auto sales are expected to rise in the second half of this year as conditions in the auto loan market ease.
Even though this news is from Canada, the bank’s prediction is based on data from our country. Scotiabank’s senior economist Carlos Gomes said in the bank’s latest global auto report that the shift is attributed to a rise in the loan-to-value (LTV) ratio for new U.S. auto loans. The LTV ratio is now 89.1%, the highest it has been since August 2008, up from 86.4% in February, CBC News reports.
"The increase in the loan-to-value ratio indicates buyers need a smaller down payment to purchase a new vehicle, and points to an easing in credit conditions," said Gomes.
Scotiabank also said that auto loan approvals have reached their highest point since April of this year.
Since the U.S. and Canada’s automobile sales and auto loan financing are parallel in many ways, if Canada says they see signs of auto lending improving, our country shouldn’t be too far off.
Hopefully U.S. consumers will soon see the same credit unfreezing that Canadian car shoppers are seeing when they apply for an auto loan.
Image by Mike Cassese/Reuters via The Vancouver Sun.
See, Canada is smarter than the U.S. in yet another way. When are our banks going to take a page from Canada's book and start giving people car loans again?
Comments
1 comments on this story so far.