How Much Car You Can ACTUALLY Afford (By Salary)

Summary by Krater

The video analyzes the true costs of car ownership and evaluates popular car budgeting guidelines including the 20/3/8 rule, the 20/4/10 rule, Dave Ramsey's method, and the 10/10 rule, concluding with practical advice on buying reliable used cars.

From the video

Answers: How much money do you need to make to afford a car?

• Car financing and true cost of ownership
• 20/3/8 car buying rule
• 20/4/10 car budgeting rule
• Dave Ramsey car buying method
• 10/10 car financing rule
• Dealer loan debt-to-income limits
• Vehicle depreciation rates

What it concludes

• Monthly car payments are only a small part of the true cost of car ownership.
• The 20/3/8 rule suggests 20% down, a 3-year loan, and spending no more than 8% of income on transportation.
• The 20/4/10 rule suggests 20% down, a 4-year loan, and spending no more than 10% of income on transportation.
• Dave Ramsey recommends paying 100% cash for a car and keeping total vehicle value under half of annual income.
• The financial samurai method recommends spending no more than 10% of gross income on a car kept for at least 10 years.
• Car dealerships look at debt-to-income ratio and will approve loans up to 45% DTI regardless of long-term financial health.