Learn more about COVID-19 in Saskatchewan. Daily case numbers and information for businesses and workers.

The Re-Open Saskatchewan plan was released on April 23rd.

<p><strong>Google Translate Disclaimer</strong></p> <p>A number of pages on the Government of Saskatchewan's website have been professionally translated in French. These translations are identified by a yellow box in the right or left rail that resembles the link below. The home page for French-language content on this site can be found at:</p> <p><a class="btn-application" href="~/link.aspx?_id=D678FFBC890C446F8B52E01E2657035D&amp;_z=z">Renseignements en Fran&ccedil;ais</a></p> <p>Where an official translation is not available, Google&trade; Translate can be used. Google&trade; Translate is a free online language translation service that can translate text and web pages into different languages. Translations are made available to increase access to Government of Saskatchewan content for populations whose first language is not English.</p> <p>Software-based translations do not approach the fluency of a native speaker or possess the skill of a professional translator. The translation should not be considered exact, and may include incorrect or offensive language. The Government of Saskatchewan does not warrant the accuracy, reliability or timeliness of any information translated by this system. Some files or items cannot be translated, including graphs, photos and other file formats such as portable document formats (PDFs).</p> <p>Any person or entities that rely on information obtained from the system does so at his or her own risk. Government of Saskatchewan is not responsible for any damage or issues that may possibly result from using translated website content. If you have any questions about Google&trade; Translate, please visit: <a href="https://support.google.com/translate/?hl=en"><strong>Google&trade; Translate FAQs</strong></a>.</p>

Understanding Negative Equity: The Risks Of Focusing On A Monthly Vehicle Payment

Released on December 18, 2018

Planning to trade-in a vehicle?  The Financial and Consumer Affairs Authority (FCAA) is warning consumers about the dangers of extended term loans (ETL) and the potential implications of owing more on a vehicle than it is worth.  This scenario is called negative equity.

“Today, it is common for consumers to finance their vehicles over a period of seven or eight years compared to four or five years, which was the previous norm,” FCAA’s Consumer Protection Division Deputy Director Denny Huyghebaert said.  “This is a significant time difference, as a vehicle will depreciate rapidly the moment it is driven off of the lot.  Consumers who purchase vehicles based on low payments due to ETL are at a greater risk of being in a negative equity position when it comes time to trade-in and purchase another car.”

As a result of entering into a ETL agreement, consumers will typically be trading-in a vehicle they still owe money on and this debt would then be rolled forward into the financing of a new vehicle.  Advertisements offering low rates, longer terms and low monthly payments make vehicles seem attractive and affordable, but it’s important to know and understand the total cost of the transaction.

Four Tips to Avoid Negative Equity:
  1. Consider a shorter-term loan to minimize the possibility of being in a negative equity position.
  2. Pay off existing vehicle loans.  Avoid rolling negative equity forward into new purchases.
  3. Don’t just focus on the monthly payment, consider the total price of the vehicle and the length of the loan.
  4. Have a budget in mind and stick to it.
Contact Consumer Protection Division

For more information about negative equity, visit http://fcaa.gov.sk.ca/consumers-investors-pension-plan-members/consumers/consumers-of-goods-and-services/purchasing-and-repairing-a-vehicle/negative-equity.

Consumers with questions can call toll free at 1-877-880-5550 or by email at consumerprotection@gov.sk.ca.


For more information, contact:

Shannon McMillan
Financial and Consumer Affairs Authority of Saskatchewan
Phone: 306-798-4160
Email: shannon.mcmillan@gov.sk.ca

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