By easing the interest rate for auto financing, shoppers and consumers can easily buy new vehicles and in the process this can help the ailing industry. This is actually one of the major findings of Scotia Economics. The report focused on the Canadian auto industry, but also took the US setting as an example. And since the dynamics of auto rates and financing is almost universal, what happens in the Canadian market is likely to be repeated or duplicated in the US.

According to the author of the study, the auto loan approvals in Canada are on its highest level since April 2008. And this means that the credit market is getting active once again after being ‘frozen’ by the financial crisis. Borrowing money in 2008 in Canada and even in the US was difficult since lending institutions have made it hard for borrowers to get their loans. This move was of course  made as a response to the collapse of financial institutions in the US. And the frozen credit markets is one of the main reasons why the sales of automobiles in North America particularly in the US and Canada were slow. According to the author, the improvement cannot be realized in a quick manner but the current situation suggests that the market is improving itself.

His positive take is based on the US data included in the study that indicated that there is an increase in the loan-to-value ratio for the new loans to around 89.1 percent. This is the highest level in the US since August 2008. This data only means that consumers and car shoppers on a loan are now putting less for down payment, which in turn means that credit is once again okay and active. The other indicator is the interest rate for auto financing. In the US, the interest rate has declined. From a high of 8.42 percent in December of 2008 to 2.79 percent on an average for 2009- this means car shoppers has the opportunity to score their chosen car without having to worry about high rates. Of course, when shoppers are given reasons to buy a new car at lower rates then this can boost sales and the industry in general.