What is the 8% rule for a car?

The 8% rule for a car is part of the 20/3/8 guideline, which helps buyers manage vehicle costs responsibly. It recommends making a 20% down payment, financing the car over no more than three years, and keeping your monthly car payment and related expenses—such as insurance and maintenance—at or below 8% of your monthly income. Following this rule can help you avoid overextending your budget while still allowing you to own and maintain a reliable vehicle.