‘That’s weird!’: 58-year-old Baltimorean hasn’t saved any money but wants to retire soon. Owes nearly as much on Harley Davidson as his mortgage. Dave Ramsey responds.

Auto loan crisis

Aggregate auto loan debt across America stood at $1.63 trillion during the second quarter of 2024, according to the Fed’s Household Debt and Credit Report. That makes it the largest source of non-mortgage debt, bigger than credit cards or student loans.

Meanwhile, the rising cost of vehicles and interest rates have squeezed American families further. A survey by MarketWatch Guides found that nearly half of all drivers say they can’t save or invest money because of the financial strain of their cars; 10% of drivers are spending over 30% of their monthly income on auto loans.

However, for many of these consumers, their auto loans are generally associated with their primary vehicle, which is a necessity. Scott has managed to pay off his primary vehicle — a truck — but finds himself in debt for a motorbike that’s a want, not a need.

Getting rid of the bike, Ramsey admitted, is the first step towards securing his financial future.

“I'm sure it's a great bike but it's gone,” he told Scott. “It's somebody else's great bike now.”

Scott, 58, has limited time to save for retirement. Regardless, Ramsey said he sees a viable path to financial freedom despite Scott’s age and lack of savings.

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New gameplan

Eight years ago, Scott went through a bad divorce. It cost him his savings. Since then, he has had more room to save but has chosen to focus on paying down his mortgage aggressively. With just $25,000 outstanding on his primary residence, Scott is on the verge of joining 40% of American homeowners who are mortgage-free, according to Bloomberg.

He has also managed to save $23,000 in cash, which serves as an emergency fund.

However, Ramsey said he believes Scott’s best asset is his career as a skilled carpenter who works in the luxury real estate market.

“The great news is, as a trim carpenter in high-end properties, you are in great demand. You've always had more work than you could take,” the veteran real estate investor said.

Looking for new contracts and more hours in his industry, while raising his rates as a freelance contractor, could significantly boost Scott’s efforts to secure financial freedom. Ramsey estimated that if Scott could save just $2,000 extra a month, he could retire by the age of 67 with $500,000 in retirement assets and a paid-off house.

“Get you a game plan man,” Ramsey says.