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

In the Northwest Territories, there isn't a specific legal maximum amortization length for car loans mandated by the territorial government. Instead, the maximum terms are primarily dictated by lender policies and prevailing market practices across Canada. For new vehicles, common amortization periods typically range from 60 to 84 months, with some lenders extending to 96 months, especially for higher-value vehicles or in a competitive market like 2025 where consumers might seek lower monthly payments amidst fluctuating interest rates. Used car loans generally have shorter maximum terms, often capped at 72 or 84 months, depending significantly on the vehicle's age and mileage at the time of financing.

Why this matters to the consumer is significant: while a longer amortization period results in lower monthly payments, it substantially increases the total interest paid over the life of the loan. Crucially, it also elevates the risk of negative equity, meaning you could owe more on the vehicle than its market value, particularly during the early years of the loan or if the vehicle depreciates rapidly. This can complicate future trade-ins or sales, as you would need to cover the difference between the outstanding loan balance and the vehicle's actual worth. Therefore, consumers should carefully weigh the immediate benefit of lower payments against the long-term financial implications and potential risks.