CARY, N.C. -

Though not as steep as the declines in other sectors, auto loan origination volumes in Canada dropped 8.8% year-over-year in the fourth quarter, according to the Q1 2021 TransUnion Industry Insights Report.

Specifically, there were 435,065 auto loans originated in Canada during Q4, compared to 476,994 a year earlier, the report indicated. In the third quarter of 2020, there were 550,295 auto loans originated.

Looking at other sectors included in TransUnion’s report, bankcard originations were down 31.4% year-over-year in Q4 in Canada, lines of credit dropped 18.3%, and installments were down 27.1%.

Meantime, mortgage originations were actually up 25.8%.

In another automotive-specific stat, consumer-level delinquency for auto was at 0.51%, down 13 basis points year-over-year.

“In Q4 2020, the Canadian credit market saw significant declines in origination volume year-over-year, suggesting that consumers have adequate liquidity and do not feel the need to engage in the credit market,” TransUnion said. “New originations dropped across all products, except for mortgages, on an annual basis.”

Offering some overall commentary, TransUnion director of financial services research and consulting Matt Fabian said, “As the economy slowly recovers, we are witnessing consumers deleveraging in the Canadian credit market, with the exception of mortgages.

 “Despite increased consumer confidence and liquidity, the decline in consumer balances and originations could pose problems for lenders that are not prepared for the changing consumer behaviours, which could result in a higher proportion of risky balances,” he said. “Lenders should consider actively seeking to replenish their portfolios with new balances and originations to maintain a manageable delinquency rate.”

Looking at more recent stats, average consumer balance on auto loans in the first quarter was $24,465, which represented a 1.33% dip from the prior quarter and a 1.02% year-over-year rise. 

In terms of unit delinquency rate, the percentage of auto loans 60 days past due in Q1 was 0.76%, down 6 basis points from the fourth quarter and 20 basis points from Q1 2020.