I'll never forget the first time I heard a commercial for a '84 month car loan'.
I was in the local Home Hardware and they had a radio station playing over the speaker system. At some point there was a commercial and the part I caught was '84 month loan'. I stopped and listened and they repeated the fact. I calculated that and blurted out "that's 7 years", to no one in particular.
I was actually taken aback by that concept; debt for a vehicle for 7 years.
Now we have the Banks and Auto Industry offering 8 -EIGHT- year loans, yet they are dissing the people who take them.
I didn't catch the whole radio commercial I heard a few weeks ago but the gist of it was the announcer excitedly proclaiming that "this is a $45,000.00 truck you can have for $99.00 bi weekly".
I have also heard ads from a different dealer telling us "Leasing is back".
I didn't realize leasing was gone.
So if the Dealers and Banks are really concerned about these long term loans, usually taken out by people who can't afford these vehicles in the first place, they shouldn't offer them........
There is growing concern among senior executives in the auto and financing industry about long-term loans that some car companies are offering to entice buyers and boost sales.
Auto consumers have been increasingly attracted to long-term loans with low monthly payments. But industry executives are worried that customers will return to showrooms before the seven or eight-year terms of their loans have been completed and find that they owe more on the their vehicle than what it’s worth as a used car.
“Longer amortizations are not good for the industry or for the consumer,” said Raymond O’Kane, managing director and head of national dealer finance for Bank of Montreal.
“We make good loans at the time,” Mr. O’Kane said at the annual TalkAuto Canada conference in Toronto Wednesday, “but nobody can predict that far out. Peoples’ lives change.”
The auto industry’s increased use of long-term loans and low-cost financing has helped boost sales to record numbers. But at a time when Canadians are already carrying heavy mortgage debt and other liabilities, the growth of financing in the auto sector is adding to worries about overleveraged consumers.
Mr. O’Kane’s comments were echoed by Ford Motor Co. of Canada Ltd. president Dianne Craig, who said Ford does not offer eight-year loans as some other auto makers do.
Loans of six years or longer make up about 69 per cent of the Canadian auto loan market, said Jeff Schuster, senior vice-president of forecasting for consulting firm of LMC Automotive. That compares with 57 per cent in the spring of 2012.
more
Long-term car loans a worrying trend for auto, financing industry - The Globe and Mail
I was in the local Home Hardware and they had a radio station playing over the speaker system. At some point there was a commercial and the part I caught was '84 month loan'. I stopped and listened and they repeated the fact. I calculated that and blurted out "that's 7 years", to no one in particular.
I was actually taken aback by that concept; debt for a vehicle for 7 years.
Now we have the Banks and Auto Industry offering 8 -EIGHT- year loans, yet they are dissing the people who take them.
I didn't catch the whole radio commercial I heard a few weeks ago but the gist of it was the announcer excitedly proclaiming that "this is a $45,000.00 truck you can have for $99.00 bi weekly".
I have also heard ads from a different dealer telling us "Leasing is back".
I didn't realize leasing was gone.
So if the Dealers and Banks are really concerned about these long term loans, usually taken out by people who can't afford these vehicles in the first place, they shouldn't offer them........
There is growing concern among senior executives in the auto and financing industry about long-term loans that some car companies are offering to entice buyers and boost sales.
Auto consumers have been increasingly attracted to long-term loans with low monthly payments. But industry executives are worried that customers will return to showrooms before the seven or eight-year terms of their loans have been completed and find that they owe more on the their vehicle than what it’s worth as a used car.
“Longer amortizations are not good for the industry or for the consumer,” said Raymond O’Kane, managing director and head of national dealer finance for Bank of Montreal.
“We make good loans at the time,” Mr. O’Kane said at the annual TalkAuto Canada conference in Toronto Wednesday, “but nobody can predict that far out. Peoples’ lives change.”
The auto industry’s increased use of long-term loans and low-cost financing has helped boost sales to record numbers. But at a time when Canadians are already carrying heavy mortgage debt and other liabilities, the growth of financing in the auto sector is adding to worries about overleveraged consumers.
Mr. O’Kane’s comments were echoed by Ford Motor Co. of Canada Ltd. president Dianne Craig, who said Ford does not offer eight-year loans as some other auto makers do.
Loans of six years or longer make up about 69 per cent of the Canadian auto loan market, said Jeff Schuster, senior vice-president of forecasting for consulting firm of LMC Automotive. That compares with 57 per cent in the spring of 2012.
more
Long-term car loans a worrying trend for auto, financing industry - The Globe and Mail