Mmastodon LifeAutos first seen 1 d ago, last 35 min ago, peak #3

The 20/4/10 rule for how much car you can afford

Original: How much car can you actually afford? The 20/4/10 rule: 20% down, 4-year loan max, payment + insurance under 10% of gros

Personal finance discussion is circulating around the 20/4/10 rule for car buying: put 20% down, keep the loan to four years or less, and cap combined payment and insurance at 10% of gross income. One worked example puts a $75,000 salary at a $625 monthly budget, about $475 after insurance, translating to a loan of roughly $19,800 at 7% over 48 months.

Why now: High car prices and loan rates are pushing buyers to seek rules of thumb for affordability.

20/4/10 rule

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Rank over time, top of the chart is #1. 48 snapshots from 1 d ago to 35 min ago.

Evidence

• How much car can you actually afford? The 20/4/10 rule: 20% down, 4-year loan max, payment + insurance under 10% of gross income. $75k salary = $625/mo. Minus $150 insurance = $475 payment. At 7% over 48 months that's a ~$19,800 loan. With $8k down + trade-in: a car of about… · smartbudgetsheets · 2

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