Car loan debt in Canada is heading somewhere Americans have already been, and the first question at any dealership is designed to get you there faster. How much do you have a month to spend? Don’t answer. The moment you do, they’ll hit that number. The loan might run 120 months. The car won’t.

Americans are already rolling old debt into new loans at scale, trading in vehicles they still owe on and burying that balance into the next purchase. Lorraine Sommerfeld’s warning: Canadian numbers look smart right now only because we’re a few months behind the same curve. Tariffs hit the US first. We’re next. In the meantime, people are taking 10-year loans on depreciating assets and calling it a deal because the monthly payment sounds manageable.

The math catches up. You are underwater the day you drive off the lot. You stay underwater for years. Rolling old debt in makes it worse. The move is to buy the whole car, not the monthly payment, and to know the difference before someone in a showroom decides it for you.

Topics: car loan debt Canada, underwater car loan, dealership financing trap, car buying tips, 120 month car loan

GUEST: Lorraine Sommerfeld | http://driving.ca

Originally aired on2026-03-02