Considering the economic impact of COVID-19, and the closures of dealerships, there has been a huge dip in the number of borrowers seeking car loans.  According to Henhoeffer, Legacy Auto Credit saw a major reduction to 10% of its normal monthly sales. And while sales are down, people are also seeking car loan payment deferrals.  Major banks like TD, Scotiabank, and RBC have offered auto loan deferral plans to ease the financial burden on customers.  Once the curve has been flattened and people adjust to the new normal, we could see an increase in the number of bankruptcy and insolvency cases. This could lead to borrowers seeking subprime lending options for car loans.  “As the economy re-starts we expect to be even busier as we are positioned in the Bankruptcy and Consumer Proposal niche,” says Henhoeffer. “Prior to COVID-19, the insolvency rate had increased 13% over last year. The insolvency industry is expecting that to double.”   Rosso believes that car loan interest rates might reduce in the future if there’s an increase in the number of loan default cases. He suggests borrowers be understanding of dealers’ financial woes right now while negotiating car loan interest rates. ”I would suggest working with the dealer as they are facing the same financial constraints that everyone is dealing with,” he says. There’s hope that the self-isolation rules will be relaxed in the coming weeks. We’ll be watching to see if there’s a spike in borrowers seeking car loans.