Q: When it comes to money, Canadians are 5 times more likely than Americans are to do this. What is it?
A: Take out a long-term car loan. 84 months
More than half of all new car loans are currently financed for 84 months — seven years — or longer. Industry standard used to be to amortize car loans over 60 months — five years — but as low interest rates settled in, payment periods began to stretch longer and longer to make monthly payments as low as possible.
The figure has since inched down a little to 51 per cent as of September, Karwel says, but for comparison purposes less than 10 per cent of American car loans are stretched out over that long a period.