How to Use the 15% Rule When Deciding on the Car You Should Buy

Buying a car is one of the biggest financial decisions most Kenyans make. In most cases, it's not always about getting from point A to B but about convenience, independence, and, for many, a symbol of success.

While owning a car feels like freedom, buying the wrong one can quietly trap you in financial stress, ballooning expenses, delayed savings, and surprise bills.

So how do you know what car you can actually afford? That is where the 15% Rule, a simple yet powerful guide that helps you decide what kind of car fits comfortably within your budget.

What Is the 15% Rule?

The 15% Rule for cars stipulates that your total car-related expenses should not exceed 15% of your gross monthly income. That includes the car loan repayment (if financed), fuel, maintenance, and insurance premiums, among other costs. By sticking to the 15% you ensure your car enhances your life rather than draining your finances.

Why the 15% Rule Matters: Owning a car comes with unpredictable costs such as rising fuel prices, occasional mechanical issues, and fluctuating insurance rates. The 15% rule helps you stay within a safe zone, leaving room in your budget for savings, investments, or emergencies.

How to Use the 15% Rule to Decide on the Car You Should Buy

Step 1: Know your monthly gross income

Start with your total monthly earnings before deductions.  Let’s use an example of someone who earns a gross pay of Ksh120,000 per month.

Step 2: Calculate 15% of that

15% of Ksh120,000 is Ksh18,000. That means your total car expenses per month, such as fuel, insurance, maintenance, and loan repayment, should stay below Ksh18,000.

Step 3: Estimate your monthly car costs

Before you commit to a car, calculate what it will cost to run it every month. For example, on fuel, you can estimate how much you will be spending monthly by using the car’s average fuel consumption per litre. You can also research online and talk to mechanics to establish the costs for maintenance.

In this case, if all the costs fall below 15%, then the car you are considering fits perfectly within your limit. But if the car’s costs add up to, say, Ksh25,000 per month, it’s a red flag — that’s 21% of your income. You might afford it today, but it will likely squeeze your budget over time.

Why the 15% Rule Is So Effective

1. It prevents financial overstretching

By setting a clear limit, you avoid the trap of letting your dream car turn into a financial burden. You enjoy your car and still have money left for other goals.

2. It forces you to think beyond the price tag

Many buyers only look at the car’s sticker price. The 15% rule reminds you that true affordability lies in the monthly cost of ownership, not just the upfront purchase.

3. It builds financial flexibility

By keeping transportation costs low, you can handle fuel price hikes or unexpected repairs without stress and still maintain your savings and investment goals.

Wrapping Up

The 15% rule isn’t about limiting your dreams; it’s about helping you buy smart. A car should make your life easier, not drain your wallet. By keeping your total car costs under 15% of your income, you protect your financial stability, maintain your savings and investment goals, and avoid the all-too-common trap of being car-rich but cash-poor.