TORONTO -

Canada’s fourth-quarter auto delinquency rate showed a modest sequential drop as well as falling substantially on a year-over-year basis, according to the latest analysis from TransUnion. The company went on to report that the aggregate amount of auto debt for the country fell, while the auto debt per borrower climbed, leading TransUnion to suggest that this points to a specific trend in auto sales.

“While total auto debt continues to decline in Canada, it is interesting to see auto debt per auto borrower rise,” said Thomas Higgins, TransUnion’s vice president of analytics and decisioning. “This means those Canadians with auto loans are either purchasing higher-end vehicles, or newer ones.”

Specifically, TransUnion found that Canadian auto borrower debt — which covers “the aggregate balance on all auto loans for an individual auto borrower” — came in at $16,189, marking the third straight quarter of increase, as it compares to $16,183 in the third quarter, and it was up 11.2 percent year-over-year.

Meanwhile, the country’s total auto debt for the fourth quarter came in at $45.8 billion, down from $46.3 billion in the prior quarter.

When 2009 ended, total auto debt stood at $48.3 billion.

As far as the rate of auto delinquencies — or the prorportion of auto accounts that have been delinquent at least 90 days — came in at 0.11 percent, which represented a narrow decline compared to the third quarter. However, this marks a strong drop from the delinquency rate from the fourth quarter of 2009, when the rate stood at 0.14 percent.

“We also continue to see positive signs with auto delinquencies as they continue to decline, with the ratio of auto accounts 90 days or more delinquent at just 0.11 percent,” Higgins shared.

The provinces racking up the heftiest delinquency rates were Manitoba and Nunavut (0.39 percent). Conversely, Newfoundland and Labrador (0.07 percent) notched the slimmest rate, followed by Quebec (0.08 percent).

Overall Figures

Moving along, TransUnion also offered some overall debt and credit card statistics for Canada during the fourth quarter.

The country’s total debt per consumer (excluding mortgages) came in a $25,709, marking a 5.6-percent year-over-year gain.

TransUnion pointed out that every province showed hikes in this category. This largest upswing was in Newfoundland and Labrador, where total debt per consumer climbed 8.1 percent. Next on the list was Ontario (up 6.4 percent).

British Columbia had the lightest uptick in total debt per consumer, as its figure jumped 3.1 percent year-over-year. Quebec was second from the bottom with a 3.71-percent uptick.

According to the analysis, the nation’s total active credit population totaled 24.91 million consumers during the fourth quarter. When 2009 ended, that figure stood at 24.85 million.

Average credit card borrower debt — which means “the aggregate balance on all credit cards for an individual bankcard borrower” — came in at $3,688.

Following two consecutive quarterly upswings, this average marks a decrease, officials said.

There was a 2.7-percent year-over-year dip in credit card debt.

Meanwhile, there was a 5.9-percent sequential uptick in the national credit card delinquency rate (proportion of accounts at least 90 days overdue), which came in at 0.36 percent. However, this marks a 7.7-percent year-over-year decline, as the delinquency rate stood at 0.39 percent in the fourth quarter of 2009.

Provincially, delinquency was highest in Prince Edward Island (0.66 percent). The province with the lightest rate was Ontario (0.23 percent).

“Our latest data set shows that the effects of the recession are still flowing through the system with the number of derogatory accounts increasing 22.1 percent in Q4 2010 compared to the same time period last year,” Higgins pointed out.

“Cautious spending behaviors involving the use of credit cards could also be seen during the holiday period as that debt dropped for the quarter and lines of credit and other forms of payment became king. Usually credit card debt increases at the end of the year as people charge their holiday purchases,” he continued.

"On a positive note, delinquencies for all credit vehicles continue to decline. Both minor (30 and 60 days past due) and major (90 and 120 days past due) delinquencies dropped 10.6 percent and 22.5 percent in the past year. This is a sign that Canadians are continuing to better manage their finances,” Higgins added.

Lines of Credit

Continuing on, TransUnion also shared data regarding lines of credit, which it noted is the country’s largest category of consumer debt outside of mortgages.

In fact, when the quarter ended, more than 42 percent of the country’s outstanding debt was lines of credit. The two provinces representing the largest share of this debt were Alberta and Ontario, as they comprised more than 57 percent of the nation’s lines of credit.

However, delinquency rates for this category — 0.2 percent in the fourth quarter — are smaller than any other product category in Canada. Moreover, this rate is dropping.

There was a 5.4-percent decrease in derogatory accounts during the fourth quarter and an 11.1-percent dip in 90- to 120-day past due accounts.

LOC delinquency rates were most severe in the Northwest Territories and Nunavut (more than 0.39 percent). The smallest rate was found in Quebec (0.12 percent), followed by Saskatchewan (0.14 percent) and Newfoundland and Labrador (0.14 percent).

TransUnion noted that LOC borrower debt — meaning “the aggregate balance on all LOC for an individual LOC borrow” — came in at $33,981.

This marked the fourth straight quarter of increase, as it moved up from $32,649 in the third quarter and against the fourth quarter of 2009, it climbed 8.8 percent.

“From the increase in lines of credit this quarter, one can safely assume that many Canadians ultimately relied on this form of credit during the last three months of 2010 and the important holiday shopping season,” Higgins stressed.

“Since many lines of credit offer attractive interest rates, many Canadians have learned to use credit cards in their initial purchase and then pay off or down the balance using their line of credit,” he added.

“This allows them to take advantage of both the loyalty programs many credit cards offer and lower interest rates of their line of credit,” Higgins added.