What is the 10/20 rule when buying a car?

The 10/20 rule when buying a car is a budgeting guideline that recommends making a down payment of at least 20% of the purchase price, financing the remaining balance for no more than four years, and keeping your total monthly auto expenses—such as loan payments, insurance, fuel, and maintenance—at or below 10% of your monthly income. Following this rule can help you manage car costs effectively, reduce interest payments, and avoid overspending on a vehicle.