Using the 20-4-10 Rule for Mercedes-Benz Financing

The Mercedes-Benz financing process is easy at Keyes European, thanks to accessible tools, resources, and guidance from our expert Mercedes-Benz financing team. We know our clients prefer shopping smarter. With that in mind, let’s examine an easier way to set a budget and pay off the vehicle you love: the 20-4-10 rule.

20% Down

One of the most challenging steps in budgeting for a new vehicle is deciding how much money to put down as a down payment. The more you put down, the quicker you’ll be able to pay off your vehicle, and the smaller your monthly payments will be. You’ll also have fewer accrued interest costs. The 20-4-10 rule recommends putting down 20% of the total vehicle value.

Four-Year-Term

The length of the payment term can also significantly impact how much money you owe every month and how quickly you’ll be able to pay your car off. Shorter term lengths tend to have more favorable interest rates, but you want to be sure you can pay monthly. According to the 20-4-10 guidelines, most drivers should opt for a four-year term as a happy medium.

10% On Transportation

The last thing you’ll want to consider when setting a vehicle budget is the total monthly cost of ownership. Here, the guideline is 10% or less of your monthly income. This includes vehicle payment, gas, insurance, and service or repair costs. Keeping it below 10% of your monthly income helps keep the ownership cost low and protects you in the event of damage or needed replacements.

Mercedes-Benz Financing in Van Nuys, CA

No matter what your Mercedes-Benz financing needs may be, Keyes European is here to help. Visit our dealership to learn more about the 20-4-10 rule and begin financing your next Mercedes-Benz vehicle today.