The Drive Well Rule (20–10–5)

Cars are where good plans fall apart

You can be saving well.

Investing consistently.
Making progress.

Then one decision, and it shifts everything.

Car finance is easy to access.

Which is exactly why it causes problems.

This isn’t about the car

It’s about what it costs you long-term.

Not just the repayments.

But the impact on:

• Your cash flow
• Your savings rate
• Your ability to invest

A car should support your life.

Not compete with it.

A simple framework that keeps you on track

The Drive Well Rule is built to do one thing:

Keep your car affordable, without slowing down your progress.

20 – Have a deposit

Save and put down at least 20%.

This reduces the loan.
Lowers your repayments.
And gives you immediate equity.

Less debt from the start
means more flexibility later.

10 – Control the total cost

Keep all car costs relating to ownership, under 10% of your gross income.

That includes:

• Loan repayments
• Insurance
• Registration
• Servicing

This is what protects your lifestyle.

And your ability to keep building.

5 – Limit the loan term

Keep the loan to 5 years or less.

Longer terms feel easier month-to-month.

But they cost more.

And often leave you paying off a car long after it’s lost its value.

Why these matter

Cars depreciate.

Quickly.

And finance terms are getting longer, not better.

Lower repayments can look manageable.

But they stretch the cost. And delay progress.

This rule keeps things simple.

And sustainable.

How to apply it

Start with your limit.

1. What does 10% of your income look like?
2. Then structure the purchase around that:
   
   1. 20% deposit
   2. Maximum 5-year loan

From there, work backwards.

Let the numbers set the price, not the other way around.

If you want to spend more

You can.

Just don’t push it onto debt.

Better options:

• Increase your deposit
• Wait and save
• Buy slightly used
• Negotiated a better price or lower interest rate

The goal isn’t restriction.

It’s control.