Audi Financing Tips: How to Use the 20/4/10 Rule

When you purchase a new vehicle, you don’t just want a vehicle that works for you, you also want one that works for your budget. The 20/4/10 rule was designed as a guideline for buyers considering Audi financing for their next vehicle. Audi Gilbert is outlining how to shop with confidence using this guideline.

The ‘20’: Down Payment

The 20/4/10 rule starts with your down payment. You should try to make a down payment of at least 20 percent on your purchase or use a trade-in with a similar (or greater) value. This can help counteract the depreciation of a new vehicle and prevents negative equity. It also lowers the amount you finance, which gives you smaller monthly payments and reduces how much interest you pay.

The ‘4’: Loan Term

The ‘4’ refers to the total length of your loan, which is also known as its term. When possible, you should keep your loan term under four years or 48 months. When you pay your vehicle off faster, you won’t end up paying as much interest. If you go under 48 months, however, your monthly car payments may be excessively high.

The ‘10’: Monthly Expenses

You should also aim to keep your total monthly payments under 10 percent of your income. This amount doesn’t just include your auto payment. You also want to estimate the cost of car insurance, maintenance, fuel, and general upkeep. By using an auto payment calculator, you can quickly get an estimate of your car payment, which can help you determine how much you should spend overall.

Apply for Audi Financing in Gilbert, AZ

While the 20/4/10 isn’t a set rule, the guideline was designed to help you make a good financial decision. Combined with our streamlined financing process, we can help you get into a new Audi vehicle in no time. Visit Audi Gilbert to get started today!