
When you’re applying for Mazda financing, the number of choices can seem overwhelming. However, if you follow the 20/4/10 rule and understand the financial terms, it’s easy to find the right plan for you, so talk to our team at Green Mazda today!
Understanding Interest Rates and APR
The APR and the interest rate both express how much your debt will grow over time, but the APR also includes fees and other additional expenses. With fixed-rate financing, this rate stays the same, but with variable-rate financing, your interest rate will be recalculated based on the prime interest rate or another index. All of this is calculated after subtracting any down payment you’ve made.
The 20/4/10 Rule
If you’re overwhelmed by the range of financing plans available to you, the 20/4/10 rule can help you focus. You should aim for a 20 percent down payment, a four-year repayment plan, and to spend no more than 10 percent of your income on transportation expenses(in other words, your monthly car payment plus things like fuel and insurance). If none of the plans available to you meet these conditions, you can improve your application or look for a more affordable car.
Improving Your Application
Adding a co-signer is the easiest way to improve your application, but make sure both signers understand the consequences of a missed payment. If you’ve recently paid off debt that hasn’t appeared on your credit report yet, explain that to your financier, including any receipts or other documentation. You can also work with a financier that targets buyers with bad credit, but you may pay a non-prime interest rate.
Get MAZDA Financing in Springfield, IL
At Green Mazda, our team works with buyers at every credit level. Our team will walk you through every step of the application process, from the first test drive to driving off the lot in your exciting new Mazda car, so stop in today!