The 20/4/10 Rule for MAZDA Financing
Car financing might appear stressful and confusing, but it doesn’t have to be. When you work with Peruzzi Mazda, or Mazda finance team is a trusted partner from the get-go, helping you find the best vehicle for your budget. The 20/4/10 rule is a helpful tool that we share with all of our customers. It can help you make the right investment in the right automobile, with minimal risk.
What is the 20/4/10 Rule?
20% Down Payment
The “20” means a down payment of at least 20 percent. The larger the down payment, the less you’ll be at risk of falling into negative equity, where your loan amount exceeds the car’s depreciated value.
Four-Year Term
This rule indicates that you don’t want to finance a car loan for more than four years. This is a balanced solution that ensures manageable monthly payments without paying excessive interest. Even though a longer loan term offers lower monthly payments, it will lead to higher overall interest, which is something savvy car shoppers at Peruzzi Mazda will avoid.
Payments Less than 10% of Your Monthly Income
Your total monthly car expenses should not exceed 10 percent of your gross monthly income. In this scenario, your total monthly car expenses include your monthly Mazda payment, interest, and insurance. This protects you against financial strain during unpredictable life circumstances, such as job loss or a medical emergency.
How to Make the 20/4/10 Rule Work for You
If your heart is set on a specific vehicle and trim at our Fairless Hills, PA Mazda dealership that doesn’t quite fit the 20/4/10 rule, there are a few options to consider. For one, consider targeting the same vehicle, but in an entry-level or midrange trim.
You could also consider dipping into the new inventory of the previous year, since this often offers some cost savings. Or, if you’re not unhappy with your current car, drive it a bit longer so you can save even more for the exact model and trim you want.
Apply for MAZDA Finance in Fairless Hills, PA Today
Now that you understand the 20/4/10 rule, take the next step and apply for Mazda financing. You can do this right from the Peruzzi Mazda website – just click the “Finance” tab, and then “Finance Application”. After you submit your application, one of our associates will contact you to discuss the new Mazda SUV or sedan you’re interested in.