There’s not much that’s more exciting than buying a new or pre-owned Hyundai car from Advantage Hyundai. However, it’s important to remember that buying a car is a large financial decision that should be carefully considered. To ensure that your Hyundai car comfortably fits into your budget, our team of Hyundai finance experts recommends following the 20/4/10 rule.
What Is the 20/4/10 Rule?
The 20/4/10 rule is a general financing rule, not set by banks or our dealership, but a smart personal finance guideline designed to help you finance a Hyundai car and avoid financial strain. It’s a framework that helps you check if a car purchase aligns well with your budget. The rule consists of three parts.
20 Percent Down Payment
The first part of the rule suggests aiming to make a 20 percent down payment of the vehicle’s total purchase price. Making a large down payment is helpful because it helps to offset the vehicle’s initial depreciation, reduces the total amount that you need to borrow, and results in a lower monthly payment.
4-Year Loan Term
The “4” in the 20/4/10 rule refers to a recommendation that your Hyundai car should be financed for no more than four years. While longer loan terms result in lower monthly payments, the downside is that you’ll be paying more in interest over time. A four-year term strikes a comfortable balance.
10 Percent of Your Gross Income
The final part of the rule suggests that your total monthly vehicle expenses should be less than 10 percent of your gross monthly income. These include not only your loan payment, but also your insurance payments, fuel costs, and any other automotive expenses.
Finance a Hyundai Car in Hicksville, NY
Now that you know how the 20/4/10 rule works, it’s time to start shopping. Visit Advantage Hyundai to browse our selection of new and pre-owned Hyundai models. Our friendly team of finance experts is happy to guide you through the financing process!
