Here at Honda Van Nuys, we believe the Honda financing process should be easy and accessible for everyone. The more drivers know about their financing options, the more empowered they’ll be to pick the right car at the right price. One of the best tools at your disposal is also one of the easiest to use. Here, Honda Van Nuys explains the 20-4-10 rule.
20% Down
One of the most important factors to consider when setting a budget for your new vehicle is the down payment. The more money you can put down on the next car, the less you’ll have to pay in monthly costs. That means you’ll be able to pay your vehicle off more quickly and have fewer accrued interest costs. The 20-4-10 rule recommends putting down 20% of the total vehicle’s value for your down payment.
Four-Year Term
Another critical factor is the length of the vehicle term. Typically, long term lengths mean smaller payments, but higher interest rates; what you save in the short term will cost you more by the time you’re done paying. Shorter loan terms will cost more month-to-month while saving you money over the life of the loan, but you must determine whether you can afford the higher payments. The “4” in the 20-4-10 rule recommends a four-year term as a healthy balance.
10% Travel Costs
Travel costs add up quickly. The 10 in the 20-4-10 rule accounts for the total cost of travel, including vehicle payments, insurance, gas, and service, and recommends drivers keep it below 10% of their total monthly income.
Learn About Honda Financing in Van Nuys, CA
When the time comes to finance your next vehicle, look no further than Honda Van Nuys. We’ll help you with every step of the vehicle financing process so you can focus on picking out the next great car. Explore our inventory and your loan and lease options by clicking or visiting today.
