Canada’s highly indebted households are starting to show serious signs of debt overload. Equifax data shows the rate of auto loan delinquencies hit a rarely seen level in Q3 2022. Consumer credit in general has seen rates begin to climb as interest rates rise. Housing remains the one exception, though that’s likely to change as the market adjusts to higher rates.
Canadian Auto Loan Delinquencies Climbed Aggressively
Canadian auto loan delinquencies are climbing aggressively, hitting rarely seen levels. In Q3 2022, about 1.97% of auto loans had become delinquent. It was a big climb of 0.31 basis points (bps) from last year, an exceptionally high rate of delinquencies. Other than three quarters (Q4 2019 to Q2 2020), the rate hasn’t been this high in at least a decade.
Canadian Auto Loan Delinquency Rate
The share of auto loan accounts that are at least 90 days past…