Mmastodon LifeAutos first seen 2 d ago, last 40 min ago, peak #3
The 20/4/10 rule for car affordability explained
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
The 20/4/10 rule for buying a car is being shared as a simple budgeting guideline: put 20% down, finance for no more than four years, and keep combined car payment and insurance under 10% of gross income. An example based on a $75,000 salary works out to roughly $475 per month for the payment after insurance, which at 7% interest over 48 months supports a loan of about $19,800.
Why now: Rising car prices and loan rates are pushing people to share simple affordability rules of thumb.
20/4/10 rulecar loanspersonal finance
Evidence
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