When you apply for Lexus financing, there are a lot of decisions to make. Between finding the perfect model and shopping for the best interest rate, however, spend some time figuring out what the right loan term length for you is. This guide from our team at Lexus of Orange Park will give you some rules of thumb to start with.
The 20-4-10 Rule
If you’ve been driving for a while, you may be familiar with the old 20-4-10 rule: you should put at least 20 percent down on a new car, pay off your loan in 4 years, and spend no more than 10 percent of your income on transportation costs. Unfortunately, car financing isn’t quite as easy as it used to be. These days, you’re unlikely to find a plan that meets all three of these conditions.
What’s a Good Term Length?
While drivers are getting used to longer loan terms, it’s still a good idea to keep yours as short as you can afford. In general, a 60-month lease is a good middle point to aim for. This lets you keep ahead of depreciation, lowers the amount of interest you’ll pay over the full term, and gives you the flexibility to switch to a new advanced model sooner.
What About Term Lengths for Pre-Owned Car Financing?
Pre-owned car financing plans used to be shorter than new car loans, but they’ve grown over the last few years. Right now, the average pre-owned car loan lasts for 70 months, about the same length as a new car loan. With a little planning, though, you may be able to still follow the old 20-4-10 rule with a pre-owned car and find a 4-year term plan.
Apply for Lexus Financing in Jacksonville, FL
Our team makes applying for Lexus financing a quick and easy process. Stop by our Jacksonville, FL, Lexus dealership and find your next great drive in our spacious showroom. Explore our specials, apply for financing, and take a test drive today!
