Car Affordability and Buying Rules Quiz

What percentage of new vehicle buyers are now signing up for four-figure car payments?

• 15%

• 25%

• 10%

• 20%

According to the 35% rule, how much should someone earning $80,000 spend on a car?

• $52,500

• $35,000

• $28,000

• $14,000

What is the suggested percentage for a down payment on a car according to the 20/4/10 rule?

• 25%

• 15%

• 20%

• 10%

Why is it risky to finance 100% of a car's cost?

• It leads to higher insurance costs.

• It increases the car's value.

• It can result in being underwater on the loan.

• It reduces the car's depreciation rate.

What is the maximum recommended loan term for a car under the 20/4/10 rule?

• 6 years

• 3 years

• 4 years

• 5 years

What should your monthly car payments, including insurance and maintenance, be less than according to the 20/4/10 rule?

• 20% of gross monthly income

• 15% of gross monthly income

• 10% of gross monthly income

• 5% of gross monthly income

What is a potential benefit of leasing a car?

• Unlimited mileage

• Lower monthly payments

• Ownership after lease term

• Higher resale value

Why might financing a car make more sense than paying all in cash?

• It reduces insurance costs.

• It increases the car's resale value.

• It allows for investment of cash elsewhere.

• It avoids interest payments.

What is one tip for saving money on car insurance?

• Choose the most expensive plan.

• Avoid comparing rates.

• Stick with one insurance provider.

• Call around for different insurance rates.

Why is buying a used car recommended?

• They have higher depreciation.

• They are more expensive to maintain.

• Most depreciation has already occurred.

• They come with a longer warranty.