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

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

In New Brunswick, negative equity roll-in occurs when the outstanding balance on your trade-in vehicle exceeds its current market value, and that deficit is added directly to the principal of your new car loan. This practice, prevalent across Canada, significantly inflates the total amount you are financing, resulting in higher monthly payments and a substantially increased total interest paid over the loan's duration. Given the current Canadian market conditions in 2025, characterized by elevated interest rates and persistent high vehicle prices, rolling negative equity can quickly place you "upside down" on your new vehicle, meaning you owe more than it's worth, often for an extended period. This matters critically because it makes it considerably more challenging to build equity in your new car, complicates future trade-ins or sales, and can trap you in a cycle of debt where you're always financing a depreciating asset for more than its value. For consumers in NB, it's crucial to understand these implications and explore options like paying down the shortfall separately, making a larger down payment on the new vehicle, or selecting a less expensive model to mitigate these financial risks.

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