The answer to this is simple — the shortest period of time possible. When choosing payment terms, be aware that a shorter length of time means lower interest rates and lower monthly payments. Choose an auto financing that can have no fees for preapproved payments.
Some companies advise a maximum of 4 years to finance a car following the 20/4/10 rule (as applied in private wealth management and retirement planning).
● Make a downpayment of 20 percent
● Finance the car for less than 4 years
● Total monthly vehicle expenses do not exceed 10 percent of gross monthly income
Another rule that you can apply is the 20/5/10 formula, but instead of 4 years - this rule has a term of 5 years or 60 months. Don't forget to add on your other debt obligations in either of these rules.