Understanding the 20/4/10 Rule for Ford Financing

Here at Woodhouse Ford of Omaha, we believe the Ford financing process should be as simple and easy as possible for all drivers. That’s why we provide useful tools and resources for every step of the financing journey, and why we’re answering your pressing questions about financing options. Here’s a look at a financing guideline that can help you get the car you love at the price you love.

The 20/4/10 Rule Explained

The more you understand about the vehicle financing process, the easier it will be to stick to your budget and take home a car you love. That’s where the 20/4/10 rule can help.

20 Explained

In the 20/4/10 rule, the 20 stands for your down payment, which is the amount of money you hand over to the dealership the day you take your vehicle home. The larger the down payment, the smaller your monthly payment, and the more quickly you’ll be able to pay off your vehicle. The 20/4/10 rule recommends paying 20% of the total cost upfront.

4 Explained

You also want to consider how quickly you’ll be able to pay your Ford vehicle off, and that’s where the 4 in the 20/4/10 rule comes in. The 4 stands for term length, in this case, four years.

10 Explained

When purchasing a vehicle, you also want to think about the overall cost of car ownership and use. In the 20/4/10 rule, the 10 stands for the total transportation costs you should pay each month, including vehicle payment, fuel and maintenance, and insurance. The 20/4/10 rule recommends that these costs do not exceed 10% of your monthly income.

Learn more about the Ford financing process and find the vehicles you love at the prices you love right here at Woodhouse Ford of Omaha. Take a test drive in an exciting new or pre-owned Ford car, truck, or SUV at our dealership today.