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Ask Dave

The Car Rule

Madea wants to know what Dave’s rule of thumb is when it comes to vehicles. Dave explains.

QUESTION: Madea on Facebook wants to know what Dave’s rule of thumb is when it comes to vehicles. Dave explains.

ANSWER: All of your vehicles—cars, trucks, boats, Sea-Doos, motorcycles, and their sisters—should not total more than half your annual income. Why? Because all of those things go down in value, and as a percentage, you don’t want half of your income tied up in things that are dropping like a rock. If you make $30,000 a year, you do not need a $20,000 car. If you make $300,000 a year, you do not need a $400,000 car. It’s absurd.