A Quick Rule For Smart Car Buying

20/4/10 Great Tip for Staying Out Of Debt

May 22, 2018

I think sometimes quick tricks or rules of theumb can help us to stay withing our spending limits thanks to Dave Ramsey I have learned and applied many in my life. The 20/4/10 rule of thumb  is a good example of one. I

Here’s how it works:

20% down payment on the car.

4-year car loan or less.

10% or less of your gross monthly income goes towards car expenses including gas, insurance, DMV fees, repairs, parking/speeding tickets, and interest payments.

Imagine you want to purchase a new car for $20,000 and you earn roughly $40,000 a year. That means you need to put at most a down payment of $4,000 (20% of the cost) and spend no more than $400 a month (10% of your income) on expenses for it.Good tip.... right??