Toronto, Ontario – Canadians still prefer 60-month loans when purchasing vehicles, according to a new report by J.D. Power and Associates, but 72- and 84-month loans are also becoming popular.
Through the first five months of 2009, slightly more than 40 per cent of all finance contracts taken out at the dealership have been for 60 months. The report said that more of a concern is that 72-month loans have climbed to almost 23 per cent of the total, and loans of 84 months or longer now comprise 15.3 per cent of the retail finance business.
In the competitive and growing compact crossover (CUV) segment, loans of six years or more account for more than 38 per cent of the total mix.
There has been a higher percentage of 60-month loans for midsize crossovers, both in luxury and non-luxury, than in most other segments shown. The 60-month loans for non-luxury midsize crossovers lead the industry with a 47.6 per cent mix. In the midsize premium luxury crossover segment, the mix of 48-month loans is much greater than in any other segment, accounting for approximately three out of every ten contracts.
The report found that the midsize pickup segment tends to skew more toward 72-month loans than the other segments, far exceeding the industry average.