When you're shopping for a new car, you want to be sure that you are picking out something that you can afford. One Hyundai finance rule that some drivers follow is the “20/4/10 rule.” Here is how that rule can help you budget for a car at Hall Hyundai Elizabeth City.
The Down Payment
The “20” references the down payment for your new Hyundai vehicle. You should try to pay 20% of the car's cost upfront. Then you finance the rest of the car's purchase price, 80%, with your loan.
Your Hyundai Loan Term
The “four” means that you should opt for the four-year loan term. This is how long you have to pay back your loan. With this term length, your monthly payments should be affordable and you won't end up paying too much in excess interest.
Monthly Payments
Finally, we arrive at the “10” part of the rule. If you're financing a new car, you don't want to overextend yourself financially with its monthly payments. It can be tempting to opt for a higher trim level or add in premium features, but you should make sure that you can afford a vehicle before you go for the extra bells and whistles.
This rule recommends that you do the math and make sure that your total car ownership costs don't exceed 10% of your income each month. That means that you need to consider not only your monthly payment, but fuel costs, insurance premiums, parking, and any other costs associated with car ownership.
Talk to Our Hyundai Finance Team to Learn More
If you're ready to finance a vehicle, visit Hall Hyundai Elizabeth City. We'll help you find a loan that works for you and your budget.
