Cash is king, and the best way to buy a car is with cash. However, sometimes this isn't realistically possible so we have the 20/4/10 rule in finance for servicing a car loan.
The "20/4/10" rule suggests a 20% down payment, a 4‑year loan term, and that car expenses (including payments) should not exceed 10% of your monthly income. Calculate below to see if you meet this guideline.
Note that the loan term we have in our calculation below (whether compounded weekly, fortnightly or monthly) is fixed to a 4-year period (208 months, 104 fortnights or 48 months) to follow our rule.