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In BC, what should I know about negative equity roll-in for car loans?
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Car Loan Glossary • bc

In BC, what should I know about negative equity roll-in for car loans?

In British Columbia, negative equity roll-in occurs when the outstanding balance on your current vehicle loan exceeds its trade-in value, and that deficit is then added directly to the principal of your new car loan. This practice significantly inflates the total amount borrowed for your new vehicle, leading to higher monthly payments, a potentially longer repayment term, and a substantial increase in the total interest paid over the life of the loan.

Why this matters: In the current Canadian market, especially in 2025 with prevailing higher interest rates and rapid vehicle depreciation, rolling negative equity can quickly put you further upside down on your new car, trapping you in a challenging financial cycle. It makes it difficult to build equity and potentially limits your options for future vehicle upgrades or sales without incurring further debt. Consumers in BC should meticulously review all financing details and strongly consider strategies such as paying down the existing shortfall, making a larger down payment on the new vehicle, or opting for a less expensive car to mitigate this significant long-term financial burden.

References:

Related Topics: bc province topic

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