20/4/10 Rule for MAZDA Financing

Buying a vehicle can be stressful, but it doesn’t have to be when you follow the suggestions from our Mazda financial experts. One commonly cited recommendation is the 20/4/10 rule, which gives you three excellent guidelines to follow when purchasing a new car. To learn more or get started, visit us at Sansone Mazda today. 

Aim for a 20% Down Payment 

As long as your budget allows for it, one of the best things you can do when purchasing a new Mazda model is to make a 20% down payment. If you’re able to put down even more than 20%, you should consider doing so – the more money you put down at the start of your loan, the less interest you’ll end up paying. It’s always possible to purchase a vehicle without a 20% down payment, but it’ll cost more in the long run. 

Choose a Four-Year Term 

The next part of the 20/4/10 rule is choosing the length of your loan. It’s recommended that you completely pay off your car in around four years/48 months. The shorter your car loan term is, the more expensive it’ll be monthly. However, it also means you’re paying much less interest when compared to a loan that’s six years or longer. You should aim to make your loan length as short as your budget allows for. 

Keep All Expenses Under 10% 

Another important aspect of the 20/4/10 rule is that you should keep all car-related expenses under 10% of your gross monthly income. You should note that this includes everything from your actual monthly Mazda payment to other costs such as fuel, insurance, parking, and any regular maintenance. This allows you to remain under as little financial stress as possible while paying off your car. 

Talk to Our MAZDA Financial Experts in Woodbridge, NJ, Today 

If you’re ready to buy a brand-new car or have any other questions concerning the 20/4/10 rule and its importance, stop by our Woodbridge, NJ, Mazda dealership. You can also go on our website to get pre-approved for Mazda financing before you visit. Call us or schedule an appointment today!