This post technically violates my own financial rules. The written ones. The preached ones. The ones I tell other physicians to follow. And yet, six months later, I am convinced it was still the right decision. If you follow along with my financial journey, you know that I am very anti-debt. Most debt is bad debt, meaning it is a liability that takes money out of your pocket every month. Home mortgages, student loans, and credit card debt all fall into this category. While credit card debt remains the undisputed mother-in-law of bad debt, a car loan is a close second.

Beyond that, I am also on record as someone who does not derive much joy from cars. I famously drove around in a true beater for the first five years of my practice.

So taking out a car loan would be a massive financial no-no for me. Right?

Well, about six months ago, Selenid and I took out a car loan. And no, despite the date this is being published, this is not an April Fools’ joke. In fact, some especially observant readers already figured this out from my recent net worth snapshots.

Let me explain.

3 Reasons I Took Out a Car Loan

1. My Car Hit a Metaphorical Wall

You can get the full background on my original car choice elsewhere, but the short version is this. I bought a used Toyota Avalon coming out of training and drove it for five years.

About a year ago, my car registration expired, which meant I needed a new inspection to re-register it. Standard procedure in New York State.

As you may also recall, I am not a particularly skilled driver. Over the years, I managed to clip my garage more times than I care to admit while pulling in and out. The result was a collection of scratches, dents, broken tail lights, and eventually a bumper that was barely hanging on until it actually fell off (see below).

In short, the car was no longer going to pass inspection. The quote to fix everything came in at over $10,000. There was no chance I was putting that kind of money into a car with more than 100,000 miles and very little life left.

That meant it was time for a new car, which brings us to reason number two.

2. Selenid Is a Car Person (Within Reason)

I get very little joy from cars beyond their ability to take me from point A to point B. Selenid is different.

She enjoys cars, not in a big engine, go fast sort of way, but in terms of comfort and safety. This has become even more important as she continues to adjust to driving in Buffalo winters, coming from Miami and all.

When I bought the used Toyota, she got a new Kia Telluride. We paid it off and owned it outright, exactly as our financial plan called for.

Fast forward five years, and she had the itch. My car finally giving up provided the perfect opportunity for what she framed as our next intentional spend: a brand new 2025 Cadillac Escalade. She would take the Escalade, and I would inherit the Telluride.

According to Selenid, the Escalade checked every box:

• Enough space for our family of five
• Plenty of trunk room for the endless rotation of sports equipment
• Entertainment for the kids
• A screen for the front seat passenger
• Seat massagers
• Hands-free driving capability
• Strong safety features in all conditions

The price tag for the model we wanted was just north of $147,000.

To be fair, this was an intentional spend. It fits within our financial plan and brings both of us more joy than the price tag would suggest. I will also admit that I enjoy driving it, especially the seat massage feature and zoning out with Netflix in the passenger seat on long drives when Selenid is behind the wheel.

So the purchase made sense.

The real question was why we used a car loan at all. I am a firm believer that if you cannot afford to buy a car in cash, you cannot afford the car.

3. We Had a Better Use for the Money (and a Plan to Pay It Off Quickly)

In this case, we could have bought the car outright. At the same time, we were actively looking to add another rental property to our portfolio.

Paying cash for the car would have required liquidating taxable investments, which we did not want to do. We needed a car immediately, thanks to mine effectively timing out, but we preferred to deploy that capital toward an asset rather than a depreciating purchase.

A few considerations pushed us toward using a loan:

• We were already in the early stages of a cash-out refinance on a rental property, which would provide a large lump sum that could be used to aggressively pay down the loan.

• Even in a worst-case scenario where we only made minimum payments, our rental cash flow alone could cover the car payment five to six times over. That margin of safety mattered.

• Even at an interest rate of roughly 8 percent, the expected return from acquiring another rental property exceeded the cost of the loan, creating positive interest arbitrage.

Ultimately, we moved forward with a minimal down payment, an interest rate around 8%, and a clear plan to pay the loan down aggressively.

Six Months Later

So where do things stand now, a little over six months later?

First, we genuinely love the car. This has clearly been an intentional spend. Selenid feels safe driving it. Transporting three kids plus skis, baseball bags, or football gear is dramatically easier. And it has made long drives far more enjoyable for me.

From a financial standpoint, we have already paid off about 60 percent of the loan and continue to chip away at it aggressively each month. It has had no meaningful impact on our day-to-day life, largely because our overall debt load remains very low.

In short, it has worked out exactly as planned.

Two Takeaways

There are two broader lessons here.

First, personal finance is rarely black and white. In the financial plan I wrote 6 years ago, I explicitly stated that we would never take out a car loan. We broke that rule, and everything turned out fine. This is not an argument to abandon financial discipline, but it is a reminder that nuance matters. Be cautious with absolutes and give yourself some grace.

Second, financial flexibility increases as your foundation strengthens. Taking out a car loan six years ago, when I had a negative net worth, credit card debt, and limited cash flow, would have been a major mistake. Today, with multiple passive income streams, minimal debt, and a clear spending plan, it is far less consequential.

Build the foundation early. Here are 7 helpful steps…The best day to start was yesterday. The next best day is today.

There you have it. My name is Jordan Frey, and I took out a car loan.

What do you think? Do you have a car loan? Was it a good or bad idea? What were the circumstances? Let me know in the comments below!