How Much Car Can I Afford (20/4/10 Rule)

If you’re in the market to buy a car, you might be asking yourself “how much car can I afford?”. In this video I teach you the 20/4/10 Rule which is a great rule of thumb to understand how much car you can actually afford.

Cars are a big financial decision that most of us have to make, and it's smart to go into a car buying situation knowing exactly how much you can truly afford. This video will help you do that.

Although I still prefer to buy cars cash, I think that the 20/4/10 Rule is a good starting point for someone to decide if a car is affordable or not related to their income and budget.

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My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos are a reflection of my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.

This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort in every video that I make. I also believe in complete transparency and open communication with my audience.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.

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  • @WhiteBoardFinance says:

    *Real men wear pink.*

    • @gavindabest says:

      Keep it up 😀

    • @WhiteBoardFinance says:

      @@gavindabest lol thanks gavin!

    • @123bigred says:

      I prefer blue or red…lol…. keep up the good work. These videos are very helpful.

    • @WhiteBoardFinance says:

      Lol thank you! (My wife bought me the shirt I had to wear it)

    • @angelpayan4229 says:

      Hey Marko, you have no idea how clearly you made me see with your financial schematics. My gf and I are saving for here electric car at an engrossing rate. Thank you for all that you do and keep up the astounding amount of effort you put into your videos. Oh 1 last thing, tell all these Neanderthals that PINK was actually a masculine colour back in the day. People are always the 2 I’s: Ignorants and Idiots lmao

  • @elkofcanada5003 says:

    I used to work in sales at Honda. I can tell you NO ONE did this. You’d constantly see 84 months with nothing down. People buy way more than they can afford. ……. Average person making 60k/yr usually bought a $40K car. Never ever saw anything less than 60 months. It’s scary. No one can afford these new cars you see driving around.

    • @WhiteBoardFinance says:

      Unfortunate. Those people will always be broke.

    • @kingcrab750 says:

      @Josh S Not necessarily true if you have excellent credit and can get good rate. I bought a $30K used car three years ago, wanted pay cash but the dealer offered 0.99% rate for 3 years, no down payment. I put the $30K in a savings account earning 1.5% interest. My monthly payment is about $860.

    • @dilididli2274 says:

      had a 60 month themr on my first new car and I have cleared it in 3 years. The salemans told me it was the first time he ever saw someone doing this. Personaly I always take themr that would let me pays my debt even if things goes wrong. So if everything goes as planned I just end paying more.

    • @kingcrab750 says:

      @Josh S I bought a used car, no rebates to speak of and price had already been negotiated before I told the F & I guy that I wanted to pay cash.

    • @510jesus says:

      That’s crazy considering car insurance is through the roof in Canada

  • @jester92345 says:

    The most important thing you said here is “delayed gratification “! This is the real money smarts that people miss out in.

    • @chainsawcharlie2 says:

      Yep. Time always beats money.

    • @financiallyinvested679 says:

      It’s a numbers game, people react to emotions rather than how the overall numbers affect them. I’m the complete opposite (it drives my social circle nuts). Numbers come first for me. If it puts me behind financially, no thanks.

    • @Miakel says:

      That is how poor stay poor. They have to have everything now. Save, damn it save!

    • @dlckddyd76 says:

      @@Miakel save save save and baaaaam! You saved millions of dollars but you never get to use it cuz you died unexpectedly. Saving isn’t the answer. Planning how to use the money you made is.

    • @moisestamayo5809 says:

      @@dlckddyd76 Exactly

  • @510jesus says:

    Unfortunately most people follow the YOLO rule. 😅😂🤣

    • @missnina198705 says:

      510jesus I wanna get one so bad I’m broke and I want a luxury car too. It’s like I’m self sabotaging but YOLO … jk kind of 🤪😏

    • @510jesus says:

      @@missnina198705 YOLO…. what about the peace of mind of not having to deal with monthly car payments and higher insurance costs. I just like the freedom of not having any payments, plus I can invest that money and get monthly interests and/or dividends. It’s addicting seeing your money making more money for you 🙂

    • @MoneyGrowthAcademy says:

      Haha so true, we just discussed why you need a MLTL mindset (might live to long)

    • @510jesus says:

      @@MoneyGrowthAcademy long life would be nice. I’d be pissed if I don’t get to enjoy these healthy savings. Lol

    • @omargenao7452 says:

      Facts lol

  • @Rali272 says:

    I did this for 10yrs. Unfortunately my divorce took all of it. Don’t get married.

    • @WhiteBoardFinance says:

      getting married was the best decision of my life

    • @lifeisgood070 says:

      @@WhiteBoardFinance How many years and how many hours are you home / together during the week?

    • @WhiteBoardFinance says:

      A decent amount. But we also give each other our own space and time with friends

    • @J88HNT says:

      Marko – WhiteBoard Finance You’re married which means you’re at risk of the divorce machine. 70%-80% of divorces are initiated by women so learn how to mitigate the damage. Follow Entrepreneurs In Cars, Rollo Tomassi and buy his book The Rational Male.

    • @J88HNT says:

      Marko – WhiteBoard Finance great channel btw.

  • @tommieboi707 says:

    I only use the 4 rule. Buy a car for 4k or less and drive it till the wheels fall off.

    • @patrickboyd3364 says:

      Smart man.

    • @helgavillavicencio9352 says:

      how many times a year do you do that?

    • @tommieboi707 says:

      @@helgavillavicencio9352 if you pick a good car(honda civic, toyota corolla) it can last you 10 years or more. Imagine saving 400 to 500 dollars a month or 4800 to 6000 per year by not having a car note. Imagine how much you can save in 5 years….10 years…..imagine investing that money….buy a cheap RELIABLE car and you wont have many issues.

    • @wilmer007 says:

      @@helgavillavicencio9352 once every 10 years.

    • @marcin97 says:

      I have a 2007 Altima, now 12 years old since new. Just like my marriage, dents here and there but looks great cause I take care of it 🙂

  • @l00katy0utb3 says:

    According to this math, I should be driving my mom’s car.

  • @QuadGuyCy says:

    Who doesn’t keep a vehicle after it’s paid off? I bought my last truck used and kept it 21 years.

  • @TheRandomeez says:

    This guy is the math teacher that we all deserved in school.

  • @vdub4utube says:

    You should always go the longest term as long as interest doesn’t increase, then pay as if it is a short term loan. This way you can always fall back to the lower payment if needed or pay it off faster if you can.

    • @ericstewart9665 says:

      This is an okay strategy when using the old standard 60 month rate but it diminishes with longer terms because the rates up up too far for the longer terms…..
      Also one must be very disciplined in paying well above the required payment because if too casual you’ll 🔥 yourself as the longer loan is set to amortize over a longer time and if one doesn’t aggressively attack it earlier and often you’ll lose.

    • @daroga says:

      Usually interest rates increase as the term increases.

    • @whatsitwhosit says:

      Agree with you. Luckily my credit scores have been good to great which helped with my interest rates. I always go for 72 months and always over pay. That way if I ever get in a pinch, I only have to pay my low-ish monthly payment. Recently paid off my current car and only paid half of the projected interest….I’m not unhappy about that.

    • @atcjoe1600 says:

      Yep,that’s what I did. Around Christmas time I go back to the lower payment to have extra money. You also have to be diligent to send in the extra the rest of the year.

    • @karengrant3468 says:

      Like paying an extra mtg pmt a year takes off 7 yrs on mtg…

  • @stephendverner says:

    If you know what to look for you can get a solid car for under $5k. Sharing your videos with my 20yr old son who is a Marine in hopes he doesn’t go buy a car he can’t afford.

  • @brookebrady5817 says:

    WOW. Thank you for your help. I am a girl in her mid 20’s and buying cars has always been so stressful and confusing to me. I need to get a car soon and I didn’t know if was making financially the right decision and because of this I am more confident in my decision. This video REALLY helped me.

  • @jacobstrouble6631 says:

    After following this kind of rule for 20+ years, I’m ready to bite the bullet and get something super expensive and nice. Driving old/used cars after a while starts to mess with your self-esteem and you just want to have something nice.

  • @cubanjavonne says:

    This video came right on time!! I was in the market for buying a Luxury car but this makes so much more sense to hold off on doing that. Thank you for this valuable information. It was truly helpful.

  • @shaneikiyasteel7073 says:

    This has helped me so much, I have a beamer and I think I will most definitely follow this rule of sticking with my mock budget of saving my monthly car note for a couple of years so that I can buy it outright or finance my car at a lower rate!

  • @robcrossan6274 says:

    I’m a Mechanic and so I always felt there was no point to making payments when I do not have to pay labor to fix my cars, I just fix them myself. I made payments on a 6 year old Camaro SS and even tho it was older with some mileage, it still felt like I had to put alot of cash aside to pay for it every month. In my opinion, it’s just not worth it. Do your research and find an older vehicle that has a good reputation for reliability, and find a good shop that will take care of you. Save the money you would be spending on a payment, and also, scratches, dings, and dents and wear are inevitable. Its alot easier to get over a dent in a 10 year old beater than a brand new car your still paying for.

  • @rab3_cle says:

    Its amazing what has happened in the past two years, this video needs an update. Out of the 2200 cars on carvana today, 850 of them are under 20k, and NONE of them are under 75k miles.

  • @JB-ie8fq says:

    watching this in 2022 where $25000 gets you a beater

  • @onlybryan47_ says:

    Currently riding a bike to work everyday. There’s days where I see the blessings in the gray. I increase my heart health/stamina. Don’t have to worry about gas prices (Cali gas prices) iykyk. But there is days where I contemplate getting a reliable car not something way out of my means. It’s just a long patient waiting game. Having to save money for it

  • @MichaelCarulli says:

    I did 17/6/13 and I’m doing alright. I think 20/4/10 is really hard to achieve nowadays. It’s more of a guide, but the most important part is the last number – making sure your car payment doesn’t exceed a certain percentage of your total income.

    • @CanuckBacon says:

      Good luck, I make 19.50/hr meaning my total car *Expenditures* should not exceed $312 a month, find me a car that doesn’t use half of that in gas alone, and the other half of that in insurance alone and that isn’t absolutely falling apart

    • @theskiesrainfire says:

      Gas is more like 150 and I’m 31 and my insurance is 219 a month.

      No accidents or anything.

      In an old scion.

      Explain to me how I can find a car for 50 bucks a month to stay in my budget.

      I won’t even be making 60k next year.

    • @joeyhenderson1624 says:

      @@theskiesrainfire 150 a month for gas ??? Bro you driving too much

    • @CJ-fh5xq says:

      @@theskiesrainfire Holy crap $219 a month? You have a DUI or points on your license? I drive a 10 year old Hyundai Elantra and I only pay $40 a month in insurance and I’m 24…

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