by Ancapistani | 2025-09-15 14:37:00+00:00
It's much easier to get financing than you might think if you've not tired - but the rates aren't great, and you're limited to fairly new vehicles. My bank only finances back to 2018 model years, and only 80% of what they consider to be "market value". In practice this means two things.

The first is that the cars that can be financed tend to be almost as expensive as new - but at a higher interest rate and shorter loan term. That means from a monthly budget perspective, you can end up paying as much for a used car as a new one while needing to keep funds available for repairs and maintenance.

The other is that older vehicles are typically financed without traditional "auto loans". If I wanted to finance a $5k truck, I could do so - but it would be an unsecured "personal loan" at significantly higher interest. You have to have fairly good credit to do that, too.

I'm not sure if the American credit score system is at all familiar to those outside the US, but the minimum score for a personal loan is around 600. While granted, I haven't been good with money most of my life, it took me from ages 30 to 35 to get my credit score to the point I could buy a home in 2018 (605). As soon as we closed on our home, my score went back down to ~570, and it has been a struggle ever since. In the seven years since then I've had exactly two "late" payments reported. Both were issues with autopay failing and my not noticing until I got a letter in the mail - at which point I immediately resolved the issue and brought the account current. My credit score right now is ~615. On paper, I carry a high credit card utilization that keeps it from being higher. In reality I pay all of my cards but one off every month. I could get my score up to ~680 in two months by paying off those cards and not using them - but unless I need the score for something, why would I? I have ~$6k in expenses that I run through those cards every month. I get 3% "cash back" for every purchase I make on them, so I end up earning an addition ~$180 / month for doing so; it'd be silly to not take advantage of that.

The result is that while I can get an auto loan on a used vehicle, it makes no sense for me to do so. Instead, I've not borrowed for a vehicle of my own since 2012. When I totaled my Jeep, I took the insurance payout and bought my '91 GMC.

We have two other vehicles: my wife has a 2019 F-150 Platinum, and my daughter has a 2024 Subaru Crosstrek Wilderness. Both are financed.

For the Ford, my sister wanted to trade it in on a Ram 2500. It wasn't drivable at the time due to a failed timing cover gasket, which the dealership estimated at $5k to repair. Another dealership offered her $12k for it. She owed $23k on a 0% note. With the towing package and other upgrades, it's worth ~$35k on the private market in running order - so I offered to pay off her loan on it ($23k). She agreed, then asked if I could just take over the loan she already had on it to continue to build her credit. That's what we did. I've got another two years to pay on it at ~$700 / month.

For the Subaru... well, we knowingly overspent there because my daughter's previous vehicle was destroyed when someone t-boned her on her way to school last winter. She was very hesitant to get back on the road, and my wife and I weren't exactly comfortable with the idea either. We compensated by buying her the absolute safest vehicle we could find that fit her use case. It came down to Subaru and Volvo; Subaru offered the best price and she preferred the Crosstrek or Outback anyhow. We could have gone as low as ~$25k or as high as ~$45k for a Crosstrek, depending on trim. We went for the Wilderness because it's geared slightly lower and therefore has more low-end acceleration - which is important to us, so she has the power necessary to get out of bad situations on the road if warranted. Total financed there: ~$37k, for six years, with a ~$750 / month payment.

All of this is to say: I make good money in tech. Though I am the sole income earner for the family, we're well over 2x the mean household income in my area. We have three vehicles as a family and ~$1.5k / month in vehicle payments. I don't understand how families making half of what I make are driving three vehicles <5 years old - but they absolutely are.

My entire debt load -- including our mortgage and some lingering student loans -- is less than my annual salary. I'm extremely uncomfortable with that much debt. Meanwhile, the people I see around me are living in homes that cost twice as much as ours, have more and newer vehicles, and make half as much. It makes no sense to me.