We have been mentioning for some time that free flowing money from Canadian banks have supercharged auto sales.
Last week we shared our thoughts on the evolving ownership model.
Today the Bank of Canada:
Industry estimates suggest that, following the pullback from
automakers’ financing arms, the share of leasing in auto
financing has declined to below 30 per cent from a peak of
66 per cent in 2007 . Instead, auto loans have become more
“lease-like,” as innovations such as longer amortizations serve
to lower regular monthly payments .
These features, which
have become increasingly popular, involve greater risk taking
on the part of both the lender and the borrower .
The following graph from BoC merely reinforces that banks are supercharging sales...