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When looking at cars for sale, it’s easy to become enticed by flashy features and end up investing in a vehicle you can’t comfortably afford. Evaluating personal expenses before heading to a car dealership will ensure you find a suitable, reliable ride without suffering financial hardship later. Below is a brief guide to the 1/10th rule and why it’s necessary to use when searching for a new or used car. 

What Is the 1/10th Rule?

From mortgages to bank fees and utilities, a person’s gross annual income is used to pay several fixed expenses. This means spending the bulk of your income on a car could cause considerable financial strain on other aspects of your life. The 1/10th rule is in place to prevent this from happening. Looking at your gross annual income, no more than 10 percent should be used towards the purchase of a new car. For example, if you make $50,000, limit your search to cars for sale that don’t exceed $5,000.

Why Is the 1/10th Rule Important to Follow When Buying a Car?

Mountain-Home-Arkansas-cars-for-saleUsing the 1/10th rule will make it easier to narrow options to find a car that won’t take a major bite out of your bank account. Knowing how much you can comfortably spend means you’ll make wiser purchasing decisions. You won’t be compelled to look at vehicles with unnecessary features or expensive add-ons that exceed your price limit. When you use the 1/10th rule, it also ensures you will have the funds for auto insurance coverage, maintenance costs, emergency repairs, and other expenses associated with car ownership. 

 

If you are looking for affordable, dependable cars for sale in Baxter County, AR, Discount Auto Sales boasts an inventory of high-quality vehicles by Ford®, Nissan®, Dodge®, and more top brands. To inquire about merchandise available at the Mountain Home dealership and car trade-in options, call (870) 425-1775. A team member is happy to discuss the selection and help you navigate the financing process. You can also visit the auto dealers’ website to browse all available cars for sale and Facebook page for new inventory alerts.  

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