Bulgarians, in general, are willing to sacrifice a great deal of personal comfort in order to boast a luxurious “four-wheeled” acquisition. Is that sensible? Hardly. And yet, the question remains: how do we determine how much we can afford to pay for the desired car without putting unnecessary strain on our budget?

Here is how you can approach this, following these popular “golden rules”:

The “20–4–10” Rule

This rule applies if you have decided to purchase a car through leasing. In general terms, it means:

• 20% of the car’s price should be paid as a down payment

• 4 years is the recommended maximum repayment period

• No more than 10% of your monthly income should go toward the monthly leasing installment

The “4/12” Rule

It states:
“Your car should cost no more than four times your monthly income.”

For example, if your household income is BGN 3,000 per month, the most reasonable option would be to buy a car costing no more than BGN 12,000.

The “10-Year” Rule

This means the following:

If you are hesitating between buying a used car or a new one, you can apply the “10-year rule.” Buy a new car only if you plan to use it for at least 10 years.

Remember: the road to wealth is built on assets whose value increases over time. A car is not one of them.