It's a financial guideline, that will help you to make smart decisions when purchasing a car.
According to the 20-4-10 Rule, one should put down at least 20% of the car’s purchase price upfront. This reduces the amount you need to finance, lowering EMI and interest.
Opt for a loan term no longer than 4 years (48 months), lowering the overall interest amount and ensuring you pay off the car faster.
The rule says, keep your total monthly car expenses, including EMI, insurance, fuel, and regular maintenance, within 10% of your gross monthly income.
Adhering to the 10% rule ensures you have enough income left for other expenses and savings, maintaining overall financial health.
Following the 20-4-10 rule helps maintain long-term financial stability.
The 20-4-10 rule ensures you can comfortably afford your car without sacrificing other financial goals.