The 20/4/10 Rule for MAZDA Financing

Car financing can be stressful and confusing, but at John Lee Mazda, we provide our customers with comprehensive Mazda financial support. Not only will we help you identify the best model for your lifestyle and budget, but we’ll share lots of financing insights – including how to use the 20/4/10 rule.  

What is the 20/4/10 Rule? 

When you’re looking at the sticker price of our new Mazda models, use the 20/4/10 rule to determine whether a certain car fits into your budget. Based on the 20/4/10 rule, you can afford a car if: 

1. You can make a down payment of 20% or more on it 

1. You can pay off a loan for the car in four years or less 

1. Your total transportation costs, including your car loan, don’t exceed 10 percent of your monthly income 

Point 1 says that a down payment of at least 20% is optimal. You could certainly put down less, but you may have to make up for it somewhere else, such as the length of the loan.  

Point 2 confirms that the ideal length of a car loan at John Lee Mazda is four years. If you go any longer, you might end up paying an excessive amount of interest. 

As for Point 3, you should keep your total transportation costs under 10% of your monthly income, including expenses such as parking, insurance, gasoline, and maintenance. 

How to Make the 20/4/10 Rule Work for You 

The 20/4/10 rule works for any type of car, whether you’re shopping for a pre-owned Mazda car or a new SUV. If you like the rule but aren’t sure whether you can make one or two parts of it work, here are some tips to consider:  

• Make a bigger down payment by trading in your current vehicle 
• Target an entry-level trim instead of a high-end one 
• Consider buying a car from the previous year’s new inventory 
• Purchase a pre-owned car?instead of a new car 
• Hold on to your current car a little bit longer so you can save more for your desired vehicle 

Get MAZDA Financing in Panama City, FL Today 

The 20/4/10 rule has stood the test of time and helped countless customers buy a terrific car at our Panama City, FL, Mazda dealership. Contact us today for more information, or just stop by our showroom so we can provide further details and set you up with a test drive.