Understanding the 20/4/10 Rule for Ford Financing

If you’ll be financing a vehicle for the first time, you probably have a lot of questions. Figuring out how much you can afford to spend is perhaps the most important consideration. Following the 20/4/10 rule can help make Ford financing a lot easier. Learn what this rule involves and how it will let you make a smart financial choice.

20 Percent Down

It’s important to put up a sizable down payment, and your goal should be 20 percent of the sale price. When you can put that much up, it will reduce the amount of money you will need to borrow, which will result in better monthly payments, and perhaps it will allow you to pay off your loan faster.

4-Year Term

The loan term will be up to you, but four years is really the sweet spot. With four years to pay back your loan, this should result in affordable monthly payments.

If you go shorter than four, your monthly payments will increase. Longer than four will mean you will end up paying more in overall interest.

10 Percent of Your Income

You don’t want your transportation costs to exceed more than 10 percent of your monthly income. And it’s important to remember that this doesn’t just include the car payments. You also have to think about things like insurance, gas, and maintenance.

Make the Right Financing Decision at Woodhouse Ford of Blair

At Woodhouse Ford of Blair, we understand that financing can be tricky to navigate. This is why we have a team of experts on hand to help you find a vehicle that best fits your budget. Get in touch with us if you have any questions. You can also start the financing process by filling out our online application.