The problem is most people buy more car than they can afford when they finance it. If I have to save $10,000, and I have it in my mind that I don't buy things on credit, I'm only going to buy a $10,000 car. But if I have $1,000 for a down payment and the car dealership talks me into a $30,000 car with zero down, I might take that deal.
True, but a complementary problem is that your $10000 used car is probably overpriced, driven up by the demand for lower-cost-up-front cars. Edmunds' 5-year TCO on a 2015 Corolla is only about $20/month less than that of a 2021 Corolla. There have been years where their estimate was for slightly higher TCO on the five-year-old car.
