Genesis Financing Tips: Using the 20/4/10 Rule

With Genesis financing, you can drive home in a gorgeous luxury vehicle today without draining your savings account. While financing is a helpful option for your next vehicle, it’s important that you budget correctly so as not to overextend yourself. Genesis of San Diego shares how to use the 20/4/10 rule, which helps to ensure it’s done right.

What Is the 20/4/10 Rule?

The 20/4/10 Rule is a guideline designed by financial experts to make things easier when financing a new or pre-owned vehicle. Even though “rule” is in the name, it isn’t a must. Just think of it as a guideline to help you avoid the potential drawbacks of financing a vehicle and ensure you’re making a smart financial decision.

How Does It Work?

Each of the numbers in the 20/4/10 Rule applies to a different parameter of auto financing. Experts recommend that you keep these suggestions in mind when you apply for a loan:

• 20: Aim to make a down payment of at least 20 percent on your new Genesis vehicle
• 4: Try to keep your loan term (loan length) under four years or 48 months
• 10: Strive to keep your monthly auto expenses under 10 percent of your take-home pay

What If I Can’t?

It isn’t necessary to follow this rule by the book, but you may see the drawbacks of financing if you aren’t around these numbers. For example, if you can’t make a large down payment or you need a long loan term, you run the risk of developing negative equity, which is also known as being upside down in your loan. A long loan term also includes more interest, which means you’ll pay more overall for your vehicle.

Apply for Genesis Financing in San Diego, CA

It’s easy to apply for Genesis financing at our dealership. We’re also happy to help every step of the way and provide personalized guidance. Visit Genesis of San Diego to get started today!