20 / 4 / 10 for car buying

Put 20% down, finance for no more than 4 years, and keep total car costs under about 10% of gross income.

Why it works

A popular US affordability heuristic. Long loans (72–84 months) feel cheap monthly but often leave you underwater when the car depreciates faster than the balance falls.

Do it exactly

Estimate with the rule, then check it against the calculator that models it properly.

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