If you're confused about the whole Lincoln financing process, the 20/4/10 formula can help you get a handle on what to expect. It can be difficult to know exactly what to plan for and how much to save up, but this quick guide can help you figure that out. Let's take a look at what the 20/4/10 rule actually is, and how you can go about applying it to your car buying process.
What Is The 20/4/10 Rule?
First and foremost, the 20/4/10 rule is not a law. It's more like general guidelines and a way to plan for vehicle expenses. Basically, the rule goes that you provide a down payment of 20% of the balance, sign a loan for a four-year period, and pay no more than 10% of your monthly income on car expenses.
These expenses include any money you put towards your new vehicle, including gas, insurance, and loan payments.
How Can I Apply The 20/4/10 Rule?
When perusing our selection of available vehicles, take a moment to consider each one's asking price. Could you realistically save up for a 20% down payment, and if so, is 10% of your income enough to cover the monthly costs?
If your loan period is four years, and only 10% of your monthly income can be spent on your vehicle, could you pay off the balance in time? Be sure to remember that while your loan payments will stay consistent, fuel and insurance costs may shift over the course of your loan period.
Now that you know all about budgeting for your next vehicle, why not stop by Woodhouse Lincoln to check out our selection of vehicles? Figure out which vehicle you want to budget for, then make your way down to test drive it in person today.
