In today’s time, everyone wants to buy their dream car. For this, he often forgets to check his budget, due to which he has to face financial problems later. In such a situation, it becomes important to be aware of the best market rules while buying a car.
In today’s time, everyone wants to buy their dream car. For this, he often forgets to check his budget, due to which he has to face financial problems later. In such a situation, it becomes important to be aware of the best market rules while buying a car. It is often seen that customers buy expensive cars for home with the help of loan. And then their condition becomes worse while paying their EMI. Many times one has to take a loan. In such a situation, you should know about the rule of 20/4/10 while buying a car.
What is the 20/4/10 rule?
20% down payment: A down payment of at least 20% of the price of the car should be made. This reduces your interest and financial pressure by reducing the loan amount for your car.
4 Loan period: While buying a car on loan, it is very important to keep in mind the loan period. The shorter your loan tenure, the less interest you will have to pay. The loan tenure for a car should be limited to 4 years (48 months). This helps you keep the interest in check till the maturity of the loan and saves you from paying interest in the long run.
Keep EMI only 10% of salary: How much EMI is being made while buying a car on loan. It is very important to take care of this. You are buying any car. You have to keep in mind that EMI should be only 10 percent of your monthly income. For example, if you earn Rs 1 lakh per month, your EMI should not exceed Rs 10,000. Having high EMI can mess up your budget. There are many other expenses involved in driving a car apart from just EMI. Therefore, try to keep the EMI to a minimum.
keep this in mind
Experts believe that most people want to have a shining SUV car. It is also true that new car buyers in the country are buying SUVs in large numbers. However, you need to be practical about a new car. Because when a customer makes a purchase keeping his budget and car maintenance in mind, he does not face any problems in the future. He says that petrol cars are cheaper than diesel cars. However, the price of petrol in the market is higher than diesel. The maintenance of a petrol car is less, whereas the maintenance of a diesel car costs more.