To determine how much car you can afford without risking financial distress, financial planners recommend the 20/4/10 rule: put down at least 20%, finance for no longer than 48 months (4 years), and ensure that your total monthly vehicle costs—including loan payment, auto insurance, gas, and routine maintenance—do not exceed 10% of your gross monthly […]

When comparing new versus used car financing, new car loans offer significantly lower interest rates—typically 200 to 350 basis points cheaper than used auto loans (averaging 6.5% for new vehicles versus 9.5% to 10.5% for used vehicles). However, because new cars suffer rapid initial depreciation—losing roughly 20% of their value in year one and 40% […]