20/4/10 Rule for Nissan Financing

When you purchase a new or pre-owned vehicle, our Nissan finance team will help you get the best terms to fit your budget and lifestyle. For many car buyers, the 20/4/10 rule works best: a 20 percent down payment, a four-year loan, and spending up to 10 percent of monthly income on transportation expenses. Bedford Nissan wants you to make the most of every dollar, so we’ve put together this guide on the 20/4/10 rule for Nissan financing.

20% Down Payment

Whether you’re financing a new or used Nissan model, the best practice is to start with a down payment of about 20% of the vehicle’s total cost. Since a large down payment can mean lower monthly payments, a shorter loan term, and less interest overall, this up-front cash payment could lower your costs in the long run.

Keep in mind that vehicle trade-ins can also count toward your down payment. If you’re trading in a vehicle, be sure to find out its value.

Four Year Loan

In general, longer loan terms mean that you’ll pay less per month, but more interest in the long run. Here are some basic formulas:

• Shorter loan life = higher monthly payments and less interest = lower overall vehicle cost
• Longer loan life = lower monthly payments and more interest = higher overall vehicle cost

Monthly interest can add up quickly, so if possible, aim for a loan life of four years. This ensures that your monthly payments aren’t too large, but also that you won’t have to pay too much interest.

Keep Transportation Costs Under 10%

Purchasing a vehicle involves budgeting. When you and the Nissan finance team calculate your monthly Nissan payments, compare it to your monthly income. Ideally, you want your total vehicle costs—including loan payments, fuel, and insurance costs—to be less than ten percent of your total monthly income.

Let Our Nissan Finance Team Help!

The 20/4/10 rule and our Nissan finance team share a common goal: to make financing your vehicle easy. And our finance team is standing by to help you! Visit our Nissan dealership in Bedford, OH, today to learn more.