Now first I want to say, that when I say new I don’t just mean NEW car, I also mean a New to you car; what that means is I use this rule where the car is brand new or used, and it doesn’t reallly matter.
Now this rule is simple, but it doesn’t mean you have to use it, for example when I bought my first car it was actually way below the 10% rule, beucase I didn’t need to buy the car I could buy, I just wanted to buy what I needed.
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What is the 10% Rule
This rule says, that a cars cannot be more than 10% of your networth on average
Now when people here this, they either smile or they start going crazy and throwing a fit
But a rule of thumb is just a guide its not a commandment like that 10 God gave us with Moses
So for example:
If your networth is $4, how the heck do you buy car
And if your networth is $1 million, do you have to buy a car for 100k
The answer is obviosly no
So if your Broke or Rich here is my Advice
Buy a car you can afford to pay for in cash.
And before you say Tommy, I don’t have any cash
I’m going to reply with ( save up the money and sell the things you don’t need around the house )
Here are some suggestions
Look at Toyota, Hundas and mazdas
These are cars with solid track records that could run for 100s of thousands of miles
And this guy on YouTube called Scotty his mechanic and he talks about these cars
So instead of looking
A 15k or 30k car and saying I can afford the car payment
Look at a 3-5k car and say what I can do to buy this things in cash
Obviously if you have more saving you can do more and if you have less you can less
Here is the Car I bought.
A 2014 Toyota Prius for $9000
And I regret buying that, they save you money on fuel but they are expensive to fix
So in the next year, I’ll probably be passing on that headache to someone else
Is It ever okay to finance a car ( suzi says 3 years is fine )
You could do it
But its not something I would personally do
So I cant tell you to do it
The benefit is:
You can buy something nicer and pay it off in 3 years
But you could also just buy something decent
Save up and buy what you want, without having to anyone any money
Some Closing Advice
My goal with a car, is to own it.
My goal with my money is to grow it and protect it from liabilities
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.
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