Smart Living Finds — Master Tools Index

True Vehicle Cost & Affordability Calculator

Don't just calculate the loan payment—calculate the **true monthly financial drain** of a car. Use this tool to combine loan costs with hidden expenses and check your purchase against the gold standard for vehicle affordability.

Your Financial Inputs

Vehicle Price (Excluding Taxes/Fees)

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Down Payment

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Annual Interest Rate (APR)

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Loan Term (Months)

M 36 Months (3 Years) 48 Months (4 Years) 60 Months (5 Years) 72 Months (6 Years) 84 Months (7 Years)

Monthly Insurance Cost

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Monthly Fuel & Maintenance Estimate

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Your Gross Monthly Income (Before Taxes)

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Used only for the 20/4/10 affordability check.

Monthly Cost Breakdown & Affordability

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Monthly Loan Payment (EMI)

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Hidden Costs (Fuel/Insurance/Maint.)

₹0

True Monthly Cost (Total)

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Applying the 20/4/10 Rule for Smart Vehicle Purchases

The **20/4/10 rule** is a fundamental guideline for vehicle affordability championed by financial planners. It ensures your car purchase doesn't compromise your savings and investing goals. Here is what each part of the rule means:

1. **20% Down Payment:** Put at least 20% down to prevent being **"upside down"** (owing more than the car is worth) as soon as you drive off the lot due to depreciation.
2. **4-Year (48 Month) Loan Term:** Keep your loan term to **4 years or less**. Longer loans mean more interest paid and a greater risk of high maintenance costs coinciding with a still-large loan balance.
3. **10% Total Cost:** Your total monthly car-related costs (loan payment + insurance + maintenance + fuel) should not exceed **10% of your gross monthly income.** This is the most critical check for long-term financial health.

This calculator checks your inputs against all three criteria, with the 10% figure being the primary affordability metric shown in the results. By sticking to this rule, you ensure the convenience of a vehicle doesn't come at the cost of your future wealth.

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