For example, if your income is $50,000 per year, spend no more than $5,000 on buying the car. ![]() ![]() The 1/10th RuleĪccording to the 1/10th rule, you should only spend 1/10th of your gross annual income on the purchase price of a car. While it’s a good idea to set a budget based on your salary, not everyone has a steady stream of income or can plan ahead of time.įortunately, there are several budgeting rules that can help anyone in any financial situation estimate how much they should spend on the car. The first step in buying any car is to assess your financial situation to see if you can even afford one in the first place. ![]()
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