When applying for Chevrolet financing, it’s important to get a personalized plan that works for you and your specific budget. That’s where the team at Shea Chevrolet can help out. We recommend following one simple guideline known as the 20/4/10 rule. Learn more about this rule below, then talk to our team to get Chevy financing customized for your needs.
Twenty Percent Down
When buying a new car, you should make a down payment that covers at least 20 percent of the total cost. A sizable down payment gives you a head start on the depreciation that kicks in as soon as you roll off the lot, making it less likely that you’ll end up upside-down on the loan. In addition, a bigger down payment can help you get a lower interest rate.
Four-Year Term
Many drivers default to selecting the longest term for their loan, but you should look for a term that lasts for four years or less. More interest builds up over the course of longer terms, meaning that you may end up paying significantly more on a long-term contract, even if the interest rate is lower. Use an online interest calculator to compare how much you can save by picking a shorter term.
Ten Percent Towards Costs
The final number in the 20/4/10 rule represents the maximum amount you should spend on your transportation costs. Planning to spend no more than 10 percent of your net income on transportation keeps you from overcommitting to a car you may not be able to afford. Remember that this includes not only your monthly car payment, but also repairs, gasoline, and other standard car maintenance costs.
Apply for Chevrolet Financing in Flint, MI
Following the 20/4/10 rule will help you set up a payment plan that works for you and your budget. Contact Shea Chevrolet today to explore your financing options and get a personalized plan for your next vehicle.
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