1. SkipCarDealer
  2. Glossary
  3. In PE, what should I know about negative equity roll-in for car loans?
In PE, what should I know about negative equity roll-in for car loans?
Open Your Account
Car Loan Glossary • pe

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

In Prince Edward Island, rolling negative equity into a new car loan means that the outstanding balance from your previous vehicle, which exceeded its trade-in value, is added directly to the principal of your new car loan. This significantly inflates the new loan amount from day one, leading to higher monthly payments and a longer repayment term, ultimately increasing the total interest you will pay over the life of the loan. From a Canadian auto finance perspective, especially looking towards 2025, lenders will scrutinize the overall Loan-to-Value (LTV) ratio, often capping it around 120-135%, as excessive negative equity increases their risk. This practice can create a challenging cycle of debt, making it harder to build equity in your new vehicle and potentially leaving you "upside down" again sooner. It's crucial for consumers in PE to understand that while it offers immediate relief by consolidating debt, it comes at a substantial long-term financial cost, making it highly advisable to pay down any negative equity separately if at all possible before financing a new vehicle.

References:

Related Topics: pe province topic

Related Financial Terms

Is it possible to I repay a car loan early?

Yes, it is generally possible and often financially beneficial to repay a car loan early i...
What is the sales tax on vehicle purchases in AB?

In Alberta, vehicle purchases are subject solely to the federal Goods and Services Tax (GS...
Explain the sales tax on vehicle purchases in AB?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Ta...
What is the sales tax on vehicle purchases in AB in Canada?

In Alberta, the sales tax on vehicle purchases is exclusively the 5% Goods and Services Ta...

Need more help?

Explore our full glossary or get in touch with our financing experts.

View Full Glossary
Search Glossary
Type a keyword and hit enter
Browse by Letter
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Popular Terms

Ready to get approved?

Skip the dealership hassle and get pre-approved for your car loan today.

Apply Now

With over 50 years of experience in the automotive industry, we know what we're doing when it comes to getting the best deals. We specialize in credit building and rebuilding, and with our expertise, we're sure to find a solution that suits you! Its our Skip Car Dealer Guarantee.

Credit Solutions

Loan Types

Programs

Partners

155-2 King Street West, Unit #107, Hamilton, ON, L8P 4S0 888-270-SKIP (7547)

PARTICIPATING LENDERS MAY VERIFY YOUR SOCIAL INSURANCE NUMBER, DRIVER'S LICENSE NUMBER, PROVINCIAL ID, OR ANY OTHER GOV IDENTIFICATIONS AND REVIEW YOUR INFORMATION AGAINST FEDERAL DATABASES TO INCLUDE BUT NOT LIMITED TO EQUIFAX, TRANSUNION, AND EXPERIAN TO DETERMINE CREDIT WORTHINESS, CREDIT STANDING AND/OR CREDIT CAPACITY. BY SUBMITTING YOUR APPLICATION AND INFORMATION ON THIS WEBSITE, YOU AGREE TO ALLOW ANY AND ALL PARTICIPATING LENDERS TO VERIFY YOUR INFORMATION AND CHECK YOUR CREDIT. SKIP CAR DEALER FOLLOWS BEST PRACTICES OF THE CANADIAN FAIR TRADING ACT OF 1999. ALL FINANCE IS SUBJECT TO EMPLOYMENT STATUS AND INCOME. APPLICANTS MUST BE 18 OR OVER, TERMS AND CONDITIONS APPLY, GUARANTEES AND INDEMNITIES MAY BE REQUIRED. WE CAN INTRODUCE YOU TO A NUMBER OF FINANCE PROVIDERS BASED ON YOUR CREDIT RATING. WRITTEN QUOTATION ON REQUEST.

This site uses cookies so that we can provide you with the best user experience. By continuing to use the site you are consenting for cookies to be used. Further information on cookies and how you can disable them is available on our cookie policy.

Copyright © 2020 Skip Car Dealer All Rights Reserved.

Terms of use | Privacy Policy

Top