In NB, what should I know about maximum amortization length for car loans?

In New Brunswick, the maximum amortization length for car loans is primarily dictated by lender policies and prevailing market conditions, rather than specific provincial or federal legal limits. While 60 to 72 months was once the standard, it is now common to see terms extending to 84 or even 96 months, with some lenders occasionally offering 108 months, particularly for new or higher-value used vehicles. This shift is largely a response to rising vehicle prices and the need for more affordable monthly payments, a trend exacerbated by the current (2025) economic environment with elevated interest rates.

However, consumers must be acutely aware of the significant trade-offs involved with longer amortization periods. While they reduce your monthly payment, they substantially increase the total interest paid over the life of the loan. More critically, longer terms significantly heighten the risk of negative equity, meaning you owe more on the vehicle than it is worth, especially during the initial years when depreciation is steepest. This can create a challenging situation if you need to sell or trade in the vehicle before the loan is significantly paid down, potentially requiring you to pay out of pocket to cover the difference or roll the negative equity into a new loan, which is generally not recommended. It is essential to carefully weigh the immediate benefit of lower payments against the long-term financial cost and increased risk.