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

In Newfoundland and Labrador, while there isn't a specific provincial legal maximum for consumer car loan amortization, market practices dictate common terms. Lenders typically offer financing for 60 to 84 months (5 to 7 years), with some extending to 96 months (8 years) for well-qualified buyers and newer, higher-value vehicles. Terms exceeding 96 months are rare for standard passenger cars and are generally reserved for very specific, high-value luxury vehicles or RVs, reflecting individual lender risk assessments rather than a regulatory cap.

This matters significantly to consumers. While longer amortization periods undeniably lower your monthly payments, making more expensive vehicles appear more accessible, they come with substantial financial drawbacks. The most critical is the significantly higher total interest paid over the life of the loan. Additionally, extended terms dramatically increase your risk of negative equity, meaning you could owe more on the vehicle than its current market value, which is particularly problematic if you need to sell the car or if it's written off in an accident.

Considering market conditions in 2025, where interest rates have been elevated, the cumulative cost of interest on longer terms is even more pronounced. It's crucial for consumers in NL to carefully balance the immediate benefit of lower monthly payments against the long-term financial implications, including potential out-of-warranty maintenance costs and the vehicle's diminished resale value by the time an extended loan is fully repaid. Always ensure you understand the full cost of borrowing before committing to a loan term.