What is the 20/4/10 car buying rule?

This car-buying rule is based on the size of your down payment, the length of your loan term and the percentage of your income that goes toward transportation costs. If you follow it, budgeting for a car becomes much easier. What is the 20/4/10 rule? Buying a car is a big decision, but it doesn’t have to be stressful.

Should you follow the 20/4/10 rule?

By following the 20/4/10 rule, you can make a well-informed decision on how much to spend on a car. It provides a clear framework to determine your affordability while considering your income and lifestyle. So, the next time you're tempted to splurge on a shiny new set of wheels, remember the 20/4/10 rule—a recipe for car-buying success.

Is a 20/4/10 a good car to buy?

The compact 5-passenger sedan arrives in the U.S. market in early 2022. In general, the 20/4/10 is a perfect asset when taking a loan. Even though it may be tough to handle initially, the results justify the challenge. Despite its drawbacks, you should try using it at least once to see how things work out.