SASKATOON – New numbers from TransUnion Canada suggest the slump in oil is hitting the economy hard, as more Canadians have trouble keeping up with their auto loans. In the forth quarter of 2015, auto loan delinquency rates spiked by 10 per cent.
Oil-rich regions have suffered the most, with Alberta at a delinquency rate of 2.42 per cent and Saskatchewan at 2.66.
According to the report, financial reality may finally be sinking in, with several people still stuck in employment limbo.
Mary Castillo, a counsellor at the Credit Counselling Society, says she’s not surprised. More people have been walking through her doors, asking for help.
“It does make it very difficult when you get phone calls after phone calls from different creditors calling you and you just don’t know, if I put some money there … that means the other person is going to be left without,” she said.
Castillo says she’s heard of cases where vehicles have been seized because people can’t keep up.
“A lot of these people have bigger trucks or bigger vehicles for work sites. In the past some of the workplaces have paid for these auto loans,” she adds.
Now, some of those people are scrambling to keep up a lifestyle their incomes could previously afford. As delinquency rates climb, repo companies are expecting to see a boom in their industry.
“There was probably residual money left. And now that’s dried up,” said Robert Ray, owner of PBR Auctions in Saskatoon.
“I think the real crunch is going to come now.”
At his lot, he says more than 40 repossessed vehicles could be coming in on a monthly basis. He says he knows the economy is in trouble when the repossession industry booms.
“A lot of these people work in the oil fields in Alberta. Live in Saskatchewan. And they’re going to feel the brunt just as much of the people who live in Alberta.”
Castillo does have advice for those still waiting on work: Be proactive about your financial health, see an advisor and don’t sweep your finances under the rug.