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The federal consumer agency is sounding warning bells about the growing debt Canadians are taking on through auto loans.

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Spurred by tantalizingly low interest rates, sweeteners like stretched out loan timelines, and increasingly confident consumers who worship their wheels, car debt has been growing at a phenomenal pace.

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Consumers have been taking advantage of stretched amortization periods in recent years to take on more debt without increasing their monthly payments, the Financial Consumer Agency of Canada revealed Tuesday in a research report tracking market trends.

But they are often buying more car than they can afford, paying much more interest, and, in some cases, going on to buy new cars before the original loans are fully repaid.

“In these circumstances, consumers put themselves in the position of having to roll the debt owing on the long-term loan into the loan for the purchase of the new vehicle, thereby potentially stepping onto an ‘auto-debt treadmill’,” the agency warned.