What is the 35 rule for buying a car?

The 35 rule for buying a car is a budgeting guideline that suggests spending no more than 35% of your annual pre-tax income on the purchase price of a vehicle. For example, if your yearly income before taxes is $50,000, you should aim to spend no more than $17,500 on a car. Following this rule can help ensure that your vehicle purchase remains affordable while leaving room in your budget for other financial priorities.