When you’re looking to purchase your next Genesis vehicle, it’s essential to set a budget to ensure that you aren’t stretching yourself too thin. Our Genesis financial team recommends following the 20/4/10 rule to simplify this process. Genesis Santa Monica has the details about what this reliable guideline entails.
20 Percent Down Payment
One of the most crucial components of the 20/4/10 rule is your down payment. The amount you pay upfront lowers the amount you need to borrow, which in turn reduces your monthly payments and your annual percentage rate. When financing your vehicle, we recommend making a down payment of at least 20 percent of its total value.
4-Year Loan Term
When you apply for Genesis financing, the length of your loan term is an essential factor to consider. Although choosing a longer loan term can lower your monthly payments, your annual interest rate will increase over the life of the loan, which can impact your financing budget. The 20/4/10 rule recommends aiming for a loan term of four years to strike a healthy middle ground between shorter and longer terms.
10 Percent of Your Gross Monthly Income
When you purchase a Genesis vehicle, you’ll want to factor in its overall expenses—not just its sticker price. The 20/4/10 rule limiting the total of these monthly expenses to 10 percent of your gross monthly income. In addition to your monthly payments throughout your loan term, these costs also include coverage for your vehicle’s insurance, fuel, and routine maintenance.
Speak with Our Genesis Financial Experts in Santa Monica, CA
Following the 20/4/10 rule can help you streamline your Genesis financing process. Visit our Genesis dealership in Santa Monica, CA, to start your application with our Genesis financial experts. We look forward to meeting with you.
