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An alternative to the 2 0 % rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then incorporate
An alternative to the rule is to evaluate your budget, determine a monthly payment that you can reasonably afford, and then incorporate that information with the maturity and interest rate of a possible loan to determine the value of the potential loan. When this value is added to a saved amount of a down payment, you know the total amount that you can reasonably afford to spend on a new car.
To review this process, consider the following case:
Larry's CarBuying Decisions
Larry, who lives in San Francisco, is trying to decide between the following car models:
tableBrand and Model,CostFord Fiesta,$
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