Average used car requires $120K in income to afford, according to the 20-4-10 rule — advisors call it a 'wealth killer'
Key takeaways
- Put 20% down, finance for no more than four years and keep everything the car costs you — payment, insurance, fuel, maintenance — under 10% of your gross income.
- The problem is passing that test isn’t so easy anymore.
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Average used car requires $120K in income to afford, according to the 20-4-10 rule — advisors call it a 'wealth killer' Karkhut/Shutterstock Godwin Oluponmile Sun, June 14, 2026 at 9:00 PM GMT+7 6 min read There’s an old test for whether you can actually afford a car. Put 20% down, finance for no more than four years and keep everything the car costs you — payment, insurance, fuel, maintenance — under 10% of your gross income. That’s the 20-4-10 rule, and financial planners have abided by it for decades (1).
The problem is passing that test isn’t so easy anymore. According to a new CNBC analysis, you’d need to earn about $120,000 a year to afford an average used car under this rule (2). For context, the median U.S. household earned $83,730 in 2024, according to the U.S. Census Bureau (3). In other words, an affordability rule that was meant for ordinary car buyers now assumes an income most people don’t earn.
Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’