The 20-4-10 Car-Buying Rule Is No Longer Realistic for Most Americans
Financial planners note that the traditional '20-4-10' car-buying rule—suggesting a 20% down payment, four-year loan term, and total transportation costs under 10% of gross income—is no longer practical due to rising vehicle prices. With average new-car prices reaching $49,461 in April and used vehicles at around $26,300, following the rule often requires a six-figure income.
