Canadians have faced many unprecedented financial hurdles over the last several years. Unfortunately, financial anxiety levels remain high amongst Canadians, most recently being tied to job stability. All industries, but notably the tech industry, have been laying off many Canadian employees since the beginning of 2023.
Unfortunately, with so many Canadians losing their jobs, now more than ever, car owners need to consider how they will be able to meet their vehicle loan commitments in the event they become unemployed. As car dealers, it’s important to anticipate that consumers may have worries about their job security, and as such, they should receive relevant finance and insurance (F&I) presentations to help ease their anxieties and provide protection opportunities to their car payments if they lose their job.
In this article, we will equip Financial Services Managers with answers to these questions:
- What are the financial implications associated with job loss?
- How can car customers protect themselves from these financial implications?
- How can Financial Services Managers help customers visualize how their finances will break down if they lose their job?
What are the financial implications associated with job loss?
For the average single Canadian, the monthly cost of living is $1,708. That number jumps to $3,911 per month when considering an average family of four. In the event of job loss, income will be cut significantly, even after receiving some form of governmental employment insurance (EI).
On top of regular bills and payments, job loss means that the former employee will need to dedicate a lot of time and effort into trying to secure another role. A car becomes a life preserver that helps someone get to all the interviews and appointments that are critical within this period. Financial Services Managers can help their customers understand this risk, so they can make an informed decision on how to protect themselves from the unstable job market.
How to help your customers understand the financial implications of car loans.
It’s an unfortunate fact that if the loan holder loses their job, they’re still liable for their car loan payments.
Loan Protection, an F&I protection product, covers the customer’s car loan payments if they lose their job. This type of protection has many benefits for the customer, including:
- Delivering peace of mind knowing that their car loan payments will be paid if they lose their job;
- Offering protection to their personal savings, investments, and credit ratings; and
- Ensuring the value of other insurance policies that they may hold is maintained.
Download the Loan Protection Budget Tool and then read ‘Loan Protection Part 2 – Projecting income in the event of job loss’ for more on Loan Protection and income loss best practices and to download our related Income Visualization tool.
If you need any support with using this tool, please don’t hesitate to reach out to us at Sales@LGM.ca or contact your local LGM Dealer Development Manager (DDM).
Disclaimer: The content for our blog is written by LGM Financial Services Inc. and provided for informational purposes only. While we want to provide you with valuable insights into vehicles, protection products and related topics, none of the information posted in our blog is intended to provide you with any mechanical, financial, legal or other professional advice. LGM disclaims all liability related to our blog and provides posts on an “as is” basis; we may reference third-party sources of information and we always strive for accuracy. Any amounts are only mentioned for illustrative purposes. Product information is provided in summary form and products may not be suited to your personal circumstances; please refer to the contractual terms and conditions applying to those products. LGM is committed to integrity and transparency; while LGM may have a financial interest in certain products mentioned in our blog, we only write about products that we know and trust. Thanks for reading!
