Kaili Killpack
4 min read
When a caller named Alex phoned into Dave Ramsey's show for financial advice, he likely didn't expect to hear a warning that he was about to lose tens of thousands of dollars. But that's exactly what happened.
In a TikTok clip Ramsey shared, he responded to Alex's question about using a company stipend to cover a $38,000 vehicle loan — and he didn't hold back.
Alex had recently accepted a job that involved heavy travel. As part of his compensation package, the company offered him a monthly vehicle stipend. "So I went out and bought a brand new vehicle," he said, explaining that the stipend helped cover the car payment.
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The loan, however, was entirely in Alex's name. "I owe about $38,000," he told Ramsey, adding that his household income was around $95,000 a year.
When Ramsey explained that the company does not require employees to have a loan or lease to receive the stipend, Alex confirmed they didn't. The only requirement was that the vehicle be within four model years of new to qualify for the reimbursement.
Ramsey was quick to point out that Alex had misunderstood the purpose of the stipend. "They are asking you to use your car for work, and so they are giving you a vehicle stipend," Ramsey said. "They did not require you to have a payment in order to get the vehicle stipend."
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The financial expert emphasized that tying a stipend to a car loan was a costly mistake, especially when the car would lose value quickly due to the high number of miles Alex drives for work. "You’re about to turn $38,000 into $8,000 so fast you’re gonna blink," Ramsey said.
One of Ramsey's key points was the risk of putting too much of your income into depreciating assets. In Alex's case, his household had about $53,000 tied up in vehicles — $38,000 for his and around $15,000 for his wife's. That's more than half their annual income.
