20-4-10 car-buying rule may require $120,000-$175,000 income, planners say

Financial planners say the 20-4-10 rule—20% down, a loan capped at four years, and transportation costs under 10% of gross income—has become difficult to follow as vehicle prices and borrowing terms shift. Using average prices, the guideline implies roughly $120,000 in annual income for a typical used-car scenario and about $175,000 for a new-car scenario, both above the 2024 U.S. median household income of $83,730.