Reflecting on a distinguished 37-year career in automotive finance, John Hiscock shares insights on vehicle affordability, dealership health, and the ongoing challenges of auto loan fraud. He discusses the impact of rising interest rates on consumer stress and the evolving landscape of auto financing, including the potential for longer loan terms. Hiscock also emphasizes the importance of diversity, equity, and inclusion in the industry, despite recent cutbacks from major automakers. This conversation offers a deep dive into the financial aspects of the automotive sector and Hiscock's perspectives as he transitions into retirement.
In this replay of the June 6, 2025 episode, former Senior Vice-President of Automotive Finance at Scotiabank Canada John Hiscock talks affordability, dealership health, fraud, and retirement.
"...the last day before the GST came into place on January 1, 1991."
GST stands for Goods and Services Tax, which is a tax added to the price of most things you buy in Canada. It was introduced to make taxes clearer for consumers.
The Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption in Canada. It was introduced to replace the previous tax system, making taxation more transparent.
"...the GST was actually replacing a tax called the FST, which was sort of hidden on an invoice..."
FST stands for Federal Sales Tax, which was a tax on goods and services in Canada before the GST. It was not clearly shown on invoices, making it hard for people to see how much they were paying.
The Federal Sales Tax (FST) was a tax that was previously applied to goods and services in Canada before being replaced by the GST. It was often hidden in pricing, making it less transparent for consumers.
"And then we're certainly starting to see over the past number of months more incentives from the OEM. So we're starting to see what we would call subvented interest rates."
OEM means the original company that made your car or its parts. It's important because it indicates the source of the vehicle's components.
OEM stands for Original Equipment Manufacturer, referring to the company that originally manufactured the vehicle or its parts. In the automotive context, it often relates to the car manufacturers themselves, like Ford or Toyota.
"And then we're certainly starting to see over the past number of months more incentives from the OEM."
Incentives are deals or discounts that car companies offer to help sell cars. They can make buying a car cheaper or easier.
Incentives in the automotive industry refer to discounts, rebates, or special financing offers provided by manufacturers to encourage vehicle sales. These can include cash rebates, low-interest financing, or lease deals.
"So we're starting to see what we would call subvented interest rates. So where they're buying down the market rates to provide the consumer a lower rate."
Subvented interest rates are special low rates that car makers offer to help people buy cars. They make it cheaper to borrow money for a car loan.
Subvented interest rates are lower interest rates offered by manufacturers to encourage consumers to purchase vehicles. This is often done to stimulate sales during slow periods or to promote specific models.
"we have seen the average transaction price. And this is overall across all of our brands mixed together, you know, that's down slightly over the previous year."
The transaction price is how much you actually pay for a car after everything is added up. It's different from the sticker price you see on the car.
The transaction price is the final price that a buyer pays for a vehicle after negotiations, incentives, and any additional fees. It reflects the actual cost to the consumer rather than the MSRP (Manufacturer's Suggested Retail Price).
"...companies like Ford, Toyota, GM, Nissan, they've all recently taken steps to scale back..."
GM, or General Motors, is a big car company that makes several brands of vehicles, like Chevrolet and Cadillac.
General Motors (GM) is an American multinational corporation that designs, manufactures, and sells vehicles under various brands, including Chevrolet and Cadillac.
"...companies like Ford, Toyota, GM, Nissan, they've all recently taken steps to scale back..."
Nissan is a car brand from Japan that makes many different types of cars, including electric ones like the Leaf.
Nissan is a Japanese automotive manufacturer known for producing a wide range of vehicles, including the popular Nissan Altima and the Nissan Leaf electric car.
Select text to request an explanation
Hi everyone, happy New Year and welcome to the January 2nd,
2026 episode of the Automotive News Canada podcast.
I'm your host, Greg Lason, the digital and mobile editor at Automotive News Canada.
Coming to you from just outside Windsor, Ontario, the automotive capital of Canada.
Today on the show, we're revisiting one of our most listened to shows of 2025.
Because it's the holiday season, we'll forgo the weekly headlines and get right to the interview.
Today, we're flashing back to the June 6th episode.
We'll hear from the recently retired Senior Vice President of Automotive Finance at Scotia Bank, Canada, John Hiscock.
He reflected on his career, talked affordability, dealership health, fraud and more.
So without further ado, here's a conversation I had with the recently retired Senior Vice President of Automotive Finance at Scotia Bank, Canada, John Hiscock.
John, thanks for joining me on the podcast this week. I appreciate it.
Pleasure to be here. Pleasure to be here. Thank you very much for the invite.
Absolutely. It's great to have you. Congrats on retirement in a nutshell.
What's the career been like for you in automotive?
Yeah, well, in a nutshell, well, I guess one way to describe it, with almost 37 years in auto finance,
I started during what I would call an analog period, rotary dial phones, no internet, pink slips left on your desk when you were out on a sales call,
to now where we are in a very technology enabled digital environment.
So, you know, been through a number of economic cycles.
It's been a very interesting, long and winding road, but it's been great.
And I've had a couple of conversations with people over the past few weeks as I've been sharing the news and it does feel like it's been a blink of an eye.
So, yeah, it's been fun.
What was the biggest or most important or most interesting event or change in the industry that you can recall over your years in the business?
Yeah, well, I'll say one thing that comes to mind from a lender perspective and I think a few of the, I know you get a lot of dealers who listen to your podcast,
so some of them will remember this, but December 31, 1990, I was a retail lending officer for Ford Credit, the first company I worked for in Halifax, Nova Scotia.
And December 31 was the last day before the GST came into place on January 1, 1991.
And it was probably, you know, that day and the days up to that were probably some of the craziest days from a lender perspective.
And I think a dealer selling cars that I could ever remember because consumers, the GST was actually there.
The irony is the GST was actually replacing a tax called the FST, which was sort of hidden on an invoice, but a GST was very transparent.
So consumers wanted to avoid paying the GST.
So there was a big, there was a massive pull ahead of sales.
The reality is the actual price went down, but the tax became much more transparent.
So it was a crazy, a crazy few days.
So that's certainly one period of time that was memorable.
And then I think, you know, other time there were sort of significant things, the, you know, the advent of the Internet and the thought that the Internet was going to, you know, replace the dealer distribution network.
And of course, here we are, for me anyway, 36 years later, and the dealers are, if not more important now than they ever were, the most important part of the distribution channel.
So, yeah, I mean, the technology change over the decades has been quite something to participate in.
So why retire now?
Was it something in the industry?
Is it just time?
Did you have something personally you want to accomplish?
I just wonder what spurs a man to decide that, you know what, it's time to hang it up.
Yeah, there's a couple of things.
So I just turned 60 a few weeks ago.
Happy birthday.
And thanks.
Thanks.
So, you know, many years ago, I kind of had 60 as that date, you know, where if I could, if I could retire and things personally were in the right place that I would, I would do that.
So I mean, that's, that's one, that's one thing.
And then the other part from a business perspective is I've had the benefit of the last few years while I've been leading the business at Scotiabank to develop and have a great senior leadership team that have been supporting me.
And I feel I can move, move away from the business now and hand it over to John Contos, who will take over on Monday.
And he's got a great supporting team.
So I feel like the team is in the right place and the business is in the right place.
And, and I think the, the years ahead are going to be great for, for the business and for the, for the banks and business.
So that's really the main thing.
And, you know, I'll take some time off and maybe six or seven months from now, we'll, we'll see.
I might tip toe back in different spots.
Who knows.
Well, let's tackle Canadian auto retail one last time before you're officially retired.
And I want to start here.
You know, we've heard a lot about it.
How big of a concern is vehicle affordability right now?
Yeah, that's, that's been something we've been talking about.
And I know you've covered over the last couple of years since rates started to escalate through 20 early 2023.
And into, you know, early 2024, along with carrying costs on, on loans and just the transaction prices.
So, you know, affordability is definitely a concern from a, from a macroeconomic standpoint.
We're certainly seeing some stress in the consumer, whether you've got a car loan, a mortgage credit card, a line of credit.
You know, I think, you know, you recently would have saw all of the banks report over the past week with everybody putting aside some additional provisions for future credit losses on the expectation that there's still some, some consumer,
some consumer pain that is yet to go through the system.
So, I think affordability is, is, is definitely a concern.
What, what is started to help, and we are seeing it in, I think, in auto delinquencies, which have been relatively stable for the past almost almost 12 months is as some of the, as some of the other rates have started to come down and you've got to,
you've got a mortgage that you're carrying or renewing, like says some of those rates have fallen.
We're seeing a little bit more relief in the household overall budgeting, but still, still a fair amount of stress in there.
And I think, you know, I don't think the consumers can afford a lot more from a, from a pricing perspective.
One of the things we see automakers and their lenders do is extend that term of the loan.
And so I ask, will we see a 108 month loan term at any point soon?
Is that one way to overcome the pain in the price point?
Will we see a loan at 108 months at any time soon?
I don't think you're going to see that from the, in the banking side of, of the business.
You know, I would be, and then I would also add that I would be surprised to see a captive do that.
So I think there's a couple of other levers that, you know, that we've used over the course of history before that maybe we will reach back or, or, or double down on, you know, we'll see, and we have seen leasing penetration pickup over the last little while.
So that's a way to offset some of that, some of that monthly payment pain.
And then we're certainly starting to see over the past number of months more incentives from the OEM.
So we're starting to see what we would call subvented interest rates.
So where they're buying down the market rates to provide the consumer a lower rate.
So we're starting to see more of those incentives coming in.
We're starting to see a little bit of even cash plus rate incentives come in.
And not a big difference yet, but certainly at Scotiabank as we look at our retail, at our retail bookings over the past 12 months, we have seen the average transaction price.
And this is overall across all of our brands mixed together, you know, that's down slightly over the previous year.
So whereas prior to last year, we were seeing it continue to up.
So it's certainly gone down a little bit.
And I suspect that's a function of some pricing action through incentives by some of the OEMs.
One of the things I notice anecdotally around my Windsor Essex region is dealership upgrades are still underway.
There are a few that have been stripped right down to the bone and they are being rebuilt and refaced.
I'm wondering how dealers find themselves financially at this moment in time.
So I think what you're seeing on the very positive side speaks to the confidence that our dealer body has in the future.
So when we see dealers starting to invest in their real estate and the look and the presence that they have in the market, I think that's a great sign.
Dealers that I've spoken to, you know, certainly feel that this year has been a very strong year, thus a year to date from a financial perspective.
Coming off last year, which again, just anecdotally on a lot of dealers I've spoken to, had a good year in 2024.
And I think a lot of this comes from, you know, as we went through COVID several years ago, everybody was required to, you know, do a lot of work on their expense structure
and how they managed business and how they built their business.
And I think through those couple of years during COVID, there was a lot of really good things that were learned by the business owners
and they've been able to utilize those as we have had the ups and downs through whether the supply chain or interest rates going up and down.
So I really feel a lot of dealers are what I would call downturn ready now.
So they're in a much better position to deal with the ebbs and flows of the economic landscape, whether it be tariff.
So I believe the dealer body is from a financial perspective doing fine.
Want to shift gears to crime of all things.
I'm curious how are rising rates of auto loan fraud affecting the industry and what's being done to address that issue if nothing has been yet.
I'm just wondering if you can give me an update on sort of where auto loan fraud is at because we've written a ton of stories on them and it seems to still be happening.
What can you tell me?
Yeah, so auto loan fraud and I will say fraud in a multiple of products that you would get financing, whether they be credit cards or other things,
but certainly auto loan fraud continues to be a big area concern.
We have auto loan fraud that we're aware of and we've also got auto loan fraud and our credit losses that we really don't realize it's auto loan fraud until it until it cracks.
So I think it's prevalent through all of the loan books.
We're all doing a lot of different things to try and mitigate it.
I'll give you a few things that we've been doing at Scotia Bank and I've spoken to some of my peers within the industry and everybody's doing some different things to try and mitigate that.
Obviously, we've got lots of due diligence we do on the lending side when we get applications in.
We work with our credit bureau partners who have different sort of fraud warning.
So provide us when we get applications.
We participate in a large fraud database where all of our applications go through this database in real time to see if there's any match with previous fraudsters.
We're looking at some technology right now and there's lots of great technology out in the space that some of our vendors have come up with to see about doing some ID checks through an electronic perspective during the time of application.
We've got license scanners installed in some dealerships that are sometimes can be targets for fraudsters, dealers that are selling large luxury SUVs.
So we've got license scanners installed where the consumer will have to scan their driver's license and it'll verify that it's a real license.
What I will say, there is no one silver bullet to stop or mitigate fraud.
It is a series of tools that you try and use and cobble together to mitigate it as best you can.
It'll continue to be, it's not going to go away.
It'll continue to be an area of concern and from an industry perspective, it's not just a lender problem.
It's an auto problem, right? So it's an auto industry problem.
So often OEMs who have got issues on vehicles that are getting exported out of the country, often a lot of those are tied to some sort of fraud activity that happens.
So still lots to do, but I think we're all doing lots of different things to help mitigate it.
And what I would say is there's some good tools that are coming down the pipe that you'll see in the market,
because I think over the next few months they're going to help us even more.
Scotiabank had been advancing e-signatures, especially during the pandemic, to speed up transactions and obviously keep people's distances when COVID-19 was spreading.
Has Scotiabank auto hub provided that solution and what hurdles remain if there are any?
Yes, so auto hub has been great. We've got about 90% of our dealers are utilizing auto hub, which is our secure portal for them to transmit documentation to us.
About 10% of the loans that we fund today are through a full e-signature, so that's still quite low, 10%.
However, it's going up year after year, so still more work to do.
It's a significant change in the finance and insurance office and the dealership, so we've got to do some more work on the training side,
but it's coming along slower than we would expect, but it's moving along.
Do those e-signatures though, and this is the other side of the coin, I guess, or me playing devil's advocate,
do those e-signatures present increased opportunities for fraud or do they lock out fraud better than some other techniques?
Yes, so what it does do, where we have a large benefit with e-signatures is that they tend to be, when the documentation is submitted,
it tends to be submitted first time right, so the documentation is usually, because we've got edits in the process to send the contracts in,
we're able to actually fund the dealers back on those contracts within an hour of us getting them, whereas a non-e-signature contract package that we get in,
typically about 30% to 35% of those will be what we call held contracts, so they've got some form of an error, they're missing documentation,
so e-signature for the dealers who are listening is a great way for you to get paid very quickly for your contracts that you send to your bank
and reduce your floor plan costs. On the flip side, on fraud, we have not seen e-signature to be an enabler for fraud.
Our dealers still do their verification checks with the client in person, but no, there's no, there's no incidents of increased fraud.
I want to end here. You are a proponent for DEI. In fact, you were named an Automotive News Canada Notable Champion of Diversity and congrats on that.
Recently though, companies like Ford, Toyota, GM, Nissan, they've all recently taken steps to scale back or reevaluate their diversity, equity and inclusion programs.
What is your reaction to that as someone who really supports those initiatives? What are your thoughts on that?
When I first heard it, I was honestly, to be quite candid, I was quite disappointed. One of those companies, I spent 20 years working before I joined the bank,
so I was disappointed. To be fair, I needed to double click a little bit on some of the stories, and I think the frontline headline did require a little bit more deeper diving,
where some companies were more, I would say, adjusting their prioritization on it as opposed to eliminating their work.
So I think each of those that you've mentioned have got different levels of prioritization they've put on it.
For us at Scotiabank, we're not changing how we're approaching DEI within the bank and certainly within the auto finance business.
We're still ensuring that we're making products and services that fit our customers' needs, and the customers that are walking into the dealerships looking to buy cars and looking for financing
still have a diverse background, and that didn't change because somebody made some comments in another country.
So we are continuing to do lots of work there. My VP team are all heavily involved in different DEI initiatives within the industry and within the bank,
and we see DEI really as a continued strength of our people and our business.
John, fantastic conversation. I really appreciate it, and I wish you all the best in retirement. Thanks for joining me this week.
Thanks very much. All the best to you too, Greg.
I'd like to thank John for joining me this week. If you'd like to be a guest, have a suggestion or simply want to comment,
email me at glason at AutoNews.com, and remember you can listen to all our previous podcasts on Spotify, iTunes, Google Play,
or on our website, AutomotiveNews.ca. Just scroll to the podcast hub in the middle of our homepage,
and don't forget you can follow Automotive News Canada on X, where we're at AutoNews Canada,
and you can find me there too under at G-Lacin, A-N-C.
And finally, you can find us on LinkedIn, just search Automotive News Canada.
That does it for this episode of the Automotive News Canada podcast. We hope you'll join us next time. So long, everybody.
Bye.
Request an explanation for:
Request an Explanation
Heard something you'd like explained? We'll add it to this episode.
Sign in to request explanations for terms you heard.
Want to learn more?
Browse our glossary for plain-English explanations of automotive terms, jargon, and concepts.
See something that's not quite right? Our annotations are AI-generated and can sometimes miss the mark.
Click the flag icon on any annotation to suggest a correction.
