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

Negative equity roll-in in Saskatchewan, as across Canada, means that the outstanding balance from your previous car loan, which exceeds the trade-in value of your current vehicle, is added to the principal of your new car loan. This practice significantly inflates the new loan amount, leading to higher monthly payments, a longer repayment term, and a substantial increase in the total interest paid over the life of the new loan. For consumers, this matters immensely because it can trap them in a perpetual cycle of debt, making it harder to build equity in their vehicle and potentially leading to a continuous state of negative equity with future trade-ins. Given anticipated market conditions in 2025, characterized by potentially elevated interest rates and fluctuating used car values, rolling in negative equity can exacerbate financial strain and increase the risk of default. While lenders in SK are permitted to facilitate this, it's crucial for consumers to understand the long-term financial implications and consider alternatives like paying down the shortfall directly, waiting until their current vehicle has positive equity, or exploring options to sell their old vehicle privately to maximize its value before committing to a new loan. Always ensure full disclosure from your lender regarding all costs and terms as per Canadian consumer protection guidelines.