Mmastodon LifeAutos first seen 2 d ago, last 45 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 discussions are circulating a simple budgeting formula for car buying: put 20% down, finance for no more than four years, and keep combined payment and insurance under 10% of gross income. Applied to a $75,000 salary, that works out to roughly $475 a month for a payment, or a loan of about $19,800 at 7% interest. The rule is being shared as a reality check against stretched auto loans.

Why now: High car prices and rising loan costs are prompting people to revisit conservative affordability guidelines.

20/4/10 rulecar buyerssmartbudgetsheets

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Rank over time, top of the chart is #1. 54 snapshots from 2 d ago to 45 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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