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

In Nova Scotia, rolling negative equity into a new car loan means the outstanding balance from your previous vehicle (where its trade-in value was less than what you owed) is added directly to the principal of your new loan. This practice, common across Canada, significantly inflates the total amount you are borrowing for your new vehicle. With projected market conditions for 2025, including higher vehicle prices, elevated interest rates, and longer financing terms, rolling in negative equity can quickly put you into a deeper financial deficit. This matters because you end up paying interest on a debt that doesn't represent the value of your new asset, leading to substantially higher monthly payments and a much greater total cost of borrowing over the loan's duration. Furthermore, it makes it considerably harder to build equity in your new vehicle, increasing the likelihood of being "upside down" again should you need to sell or trade it in before the loan is significantly paid down. Consumers in NS should carefully consider the long-term financial implications, as it can severely restrict future financial flexibility and make subsequent vehicle purchases more challenging. It is always advisable to pay down the negative equity separately, if feasible, or explore less expensive vehicle options to minimize the amount rolled over.