When it comes to BMW finance advice, budgeting is the best way to plan for your vehicle’s expenses. To point our readers toward the path of BMW financing, here are some tips on how to budget for your next vehicle.
What Do I Have to Budget For?
Before beginning to budget for your next ride, it is important to take inventory of what exactly you are budgeting for. Not only should you account for the overall price of the vehicle, but the other fees and expenses that go along with purchasing a car.
When financing a vehicle, drivers are paying for more than just the principal cost of the vehicle. Additional expenses include dealership fees, insurance premiums, taxes, maintenance costs, and any parking or highway tolls drivers should encounter. These costs can add up, and thus are an important consideration when planning your overall vehicle budget.
The 20/4/10 Rule of Budgeting
To help drivers make a sound financial decision when budgeting for a vehicle, it is advised that they follow the “20/4/10” rule. While not set in stone, this rule can serve as general guidelines for how drivers can approach budgeting for a car.
The “20/4/10” rule advises drivers prepare at least a 20% down payment on the vehicle they’re interested in, before signing a four-year loan during which they pay no more than 10% of their monthly income on vehicle expenses.
These expenses are the additional fees mentioned above, including loan, insurance, and fuel payments. If you cannot realistically plan this budget, then you may want to choose a vehicle with a lower overall price.
Are you ready to tackle BMW financing head-on? Stop by BMW of Silver Spring today to check out the available selection of new and pre-owned BMW vehicles, and to have any lingering financing questions answered by our BMW finance department.