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

Working with our RAM financing professionals means that you have a team of experts dedicated to helping you get a loan package that works within your budget. For many drivers, this involves using the 20/4/10 rule to manage upfront costs as well as expenses throughout the loan life. When you’re ready to buy your next vehicle, let the friendly team at St. Louis Chrysler Dodge Jeep® RAM lend a hand.

What is the 20/4/10 Rule in RAM Financing?

The automotive industry uses the 20/4/10 rule to manage drivers’ budgets and financial expectations when they purchase a vehicle. Basically, it’s a guideline that helps you identify how much you can afford. Here’s what those numbers mean:

• 20: Try to put 20% of the sticker price down.
• 4: Ideally, you only want your loan to last four years or less.
• 10: Keep your vehicle costs (including payment, insurance, fuel, and maintenance) under 10% of your monthly income. 

Although the 20/4/10 rule isn’t possible for every driver or financing plan, it can make you carefully consider how much you spend upfront and over the years you’re paying off your loan. Identifying the down payment, loan life, and vehicle costs will also help you determine whether to buy a new or pre-owned vehicle.

Additional Vehicle Expenses to Consider

As you outline your budget, keep in mind that your RAM financing offer costs aren’t the only expenses you’ll have. Auto insurance and fuel costs will also affect your out-of-pocket costs. All vehicles also need routine and preventive maintenance, which our experts can help you estimate.

Trust the Experts in RAM Financing Near St. Louis, MO

We strive to make the RAM financing process easy and stress-free. Come chat with the loan experts at our RAM dealership near St. Louis, MO. We’ll help you get the vehicle and financing terms of your dreams!