Canadian Auto Buyers Go To Weekly Payments As Cars Get More ExpensiveAugust 28, 2017
We are all aware of how vehicle prices have been steadily rising, making the purchase of a new vehicle more and more difficult. In an attempt to make buying a new car appear to be more affordable, Canadian auto lenders have been offering Canadian auto buyers the option of making weekly or biweekly payments.
The Apparent Savings Are An Illusion for Canadian Auto Buyers
The payments appear much lower, compared to the comparable monthly payment on the same vehicle, but this is merely an illusion. These Canadian buyers have taken on the same amount of debt, regardless of the payment schedule. They may not realize how much debt they are obligated to repay until it’s too late.
More than half of Canadians with auto loans make payments every two weeks, with an increasing proportion moving to weekly loan payments. And with Canadian families’ debt loads now averaging about 167 percent of their disposable income (according to Statistics Canada), they are one income loss away from a financial disaster.
Purchasing A Vehicle Can Be An Expensive Proposition
Purchasing a vehicle creates a major financial burden. You could need a large down payment to get started. It may take a commitment to a long-term loan lasting six, seven, or eight years to get you an affordable monthly payment. You will likely own the car for several years after the warranty runs out, exposing you to unexpected repair expenses. And you may discover that you are “underwater,” when your vehicle ends up being worth less than the remaining loan balance.
Leasing A Vehicle Avoids All These Problem Areas
This is why leasing a vehicle is a much smarter way to keep your household budget under control. You get lower monthly payments, little or no money down, constant warranty coverage, a shorter term, and no possibility of being “underwater.” Leasing is a wonderful way to manage your transportation and household budgets, with no surprises along the way.