How Much Of A Car Can You Afford To Buy? Udayan Adhye Simplifies the Thumb Rule For You

Do you know that 20/4/10 rule for buying cars? It's pretty down-to-earth advice to keep your car spending in check without drowning in monthly payments.

Budget-Friendly Purchases:

So, here's the lowdown: You start by dropping 20% as a downpayment, which is smart because you're not wiping out your savings. Then, you take a 4-year loan. It's not too long, so you're not stuck in car-payment jail forever. And the kicker? You should only shell out 10% of your pre-tax monthly income for those car payments.

Now, let's see how this rule applies to different incomes. If you're making 6 lakhs a year, the rule says you can aim for a car worth 3 lakhs. Got a 12 lakh income? You can stretch your car budget to about 6.2 lakhs. And if you're rolling in with 24 lakhs, well, you can comfortably go for a car worth up to 15 lakhs.

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But here's the hack – you can still nab a pretty good car without blowing your budget. Just snag a 3-4 year old ride that's in good shape. You'll save some serious cash and stick to that 20/4/10 rule. Fancy cars might turn heads, but let's be real, they often turn wallets inside out. Keep it simple and sensible, and you'll cruise without money worries!