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Starting with the 1/10th guideline, created and pushed by Financial Samurai, this guideline states: buy a car in cash that costs less than 1/10th your gross annual pay. If you make $50,000 you should buy a car in cash worth $5000. If you make $100,000, the car you buy should be worth no more than $10,000.
20% down be able to pay 20% or more of the total purchase price up front. 4-year loan be able to pay off the balance in 48 months or fewer. 10% of your income your total monthly auto costs (including insurance, gas, maintenance, and car payments) should be 10% or less of your monthly income.
Thumb rule: 20/4/10 must not be more than 10 per cent of their monthly salary. However, if not opting for a car loan, then one can spend half their annual salary on the purchase. For example, if the net salary is Rs 12 lakh per annum, then one must not spend more than Rs 6 lakh to buy a new car.
Basically, the rule goes that you provide a down payment of 20% of the balance, sign a loan for a four-year period, and pay no more than 10% of your monthly income on car expenses. These expenses include any money you put towards your new vehicle, including gas, insurance, and loan payments.
20/4/10 is a simple rule of thumb that helps you find a vehicle that will fit your budget. ing to the formula, you should aim for a 20% down payment with a car loan of four years or less and spend no more than 10% of your monthly income on other car-related expenses.
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People also ask

How much should I spend on a car if I make $60,000? If your take-home pay is $60,000 per year, you should pay no more than $750 per month for a car, which totals 15% of your monthly take-home pay.
How much car can I afford with a 70k salary? Based on the 20/4/20 rule, with an average interest rate, you can afford a $19,000-20,000 car on your $70k salary.
ing to our research, you shouldnt spend more than 10% to 15% of your net monthly income on car payments. Your total vehicle costs, including loan payments and insurance, should total no more than 20%. You can use a car loan calculator to calculate a monthly payment within your budget.
Upfront savings are appealing when shopping for affordable and reliable transportation. Long-term expenses for potential ongoing repairs can outweigh any initial savings from a low purchase price. Buying a car under $10,000 can be a good option if you keep enough money for breakdowns and maintenance.

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