How much car can I afford on a $120,000 salary? Free calculator
On a $120,000 salary you can afford a car of about $57,082, with a loan payment of up to $1,150 a month. Change any number below to fit your situation.
Car price you can afford on a $120,000 salary
Gross monthly income: $10,000. Assumes 7% APR, $350 a month for insurance, gas and upkeep, 7% sales tax and no other debts.
| Car budget | Down payment | 48-month loan | 60-month loan | 72-month loan |
|---|---|---|---|---|
| 10% of income ($1,000/mo) | $0 | $25,368 | $30,679 | $35,631 |
| 10% of income ($1,000/mo) | $3,000 | $28,172 | $33,483 | $38,435 |
| 10% of income ($1,000/mo) | $5,000 | $30,041 | $35,352 | $40,304 |
| 15% of income ($1,500/mo) | $0 | $44,882 | $54,278 | $63,040 |
| 15% of income ($1,500/mo) | $3,000 | $47,686 | $57,082 | $65,844 |
| 15% of income ($1,500/mo) | $5,000 | $49,555 | $58,951 | $67,713 |
The 20/4/10 rule
Put 20% down, borrow for no more than 4 years, and keep all car costs under 10% of gross income. On $120,000 that points to a car of about $31,200 (loan payment $650 a month, $6,240 down).
Monthly payment on common car prices
Payment for a loan of the full price at 7% APR, compared with the $1,150 a month that fits a $120,000 income.
| Loan amount | 48 months | 60 months | 72 months |
|---|---|---|---|
| $20,000 | $479 | $396 | $341 |
| $30,000 | $718 | $594 | $511 |
| $40,000 | $958 | $792 | $682 |
| $50,000 | $1,197 ✗ | $990 | $852 |
Frequently asked questions
How much car can I afford on a $120,000 salary?
About $57,082, if you spend 15% of gross income on the car (payment plus $350 a month running costs), put $3,000 down and take a 60-month loan at 7%. The cautious 20/4/10 rule gives a lower figure.
How much car can I afford on a 120k salary?
On 120k ($120,000) a year, a car of about $57,082 keeps all car costs within 15% of income. A stricter 10% budget points to a cheaper car; see the table above.
What car payment can I afford on $120,000 a year?
$120,000 is $10,000 a month before tax. With 15% for all car costs and $350 for insurance, gas and upkeep, that leaves about $1,150 a month for the loan payment.
Know the payment you want instead? See how much car you can afford for $1000 a month, or work out a loan with the car payment calculator.
Other salaries
Guidelines only, not a lending decision. Figures use gross (pre-tax) income.