The Mazda financing process doesn’t have to be overwhelming. With help from Northtowne Mazda, it won’t be. We’re sharing everything you need to know about financing your next vehicle, including how to make the 20/4/10 financing rule work for you.
20-Percent Down Payment
If you’re not sure how much to put down on the day of purchase, consider the 20 in the 20/4/10 rule. It recommends putting down 20 percent of the total vehicle value. The more you are able to put down on the day of purchase, the more you will save on accrued interest costs over time because you will be able to pay your vehicle off more quickly. This can also help lower your monthly payment, as you won’t have to take out as large of a loan.
4-Year Term
You also want to consider the length of your vehicle’s loan term. Shorter term lengths typically have more favorable interest rates because the risk is lower for the lender, whereas longer terms have higher interest rates that can lead to higher costs over time. The 20/4/10 rule suggests striking a balance between the two sides by finding an option that will allow you to pay your vehicle off in four years or less.
10 Percent on Transportation Costs
When budgeting for your vehicle, you also want to account for your other transportation costs and fees beyond just your monthly loan payment. The rule recommends paying less than 10 percent of your monthly income on these costs. They include your insurance, fuel costs, any additional maintenance costs, and other in-between fees that can add up.
Begin the MAZDA Financing Process in Kansas City, MO
The more you know about the vehicle financing process, the more confident you’ll feel when the time comes to pick out your next car. Northtowne Mazda is here to help you along the way. Learn about your financing options today, so you can focus on picking out the vehicle you love tomorrow.
