A lot of thought and planning must be put into the Mazda financing process. Purchasing a vehicle is a milestone purchase that can be quite daunting to new buyers. The 20/4/10 rule is a great way for new buyers to begin budgeting for their new vehicle, but what exactly is the 20/4/10 rule? Here’s a closer look:
What Is The 20/4/10 Rule?
The 20/4/10 rule is a general budgeting tool used to help new buyers not break the bank when buying their first vehicle. It’s essentially a basic framework of how to budget for your next vehicle. According to the rule, buyers should put down a 20% down payment on a four-year loan, during which you only spend 10% of your monthly income on car payments. These payments include insurance, loan payments, and any repairs or maintenance you should require.
How Can I Apply This Rule?
Using this guide to plan for your vehicle expenses is easy. You just need to consider a few things, the first being your monthly income. What is 10% of your monthly income, and is it enough to make your loan payment in addition to paying for gas and insurance? Is 10% enough to meet the four-year loan period?
To consider these questions, you’ll first need to have an idea of the total amount you’ll be borrowing (the asking price of the vehicle). Having a general idea of what amount you can realistically save up 20% of will provide a good jumping-off point for applying this formula.
Still have questions concerning the Mazda financing process? No problem, reach out to Champion Mazda today for answers! Our finance department would be more than happy to answer any of your questions. You can even check out the selection of new and used vehicles available now while you’re at it!
Connect with us
