Let’s jump right into the vehicles. Yeah, cars are interesting, right? We cannot control this. It’s not in your control what happens with the price of automobiles. And again, talking about a volatile chart since 2015 all the way till now, the price of cars has gone up. You know, we had all the supply chain issues that happened during COVID, and it caused both used car prices as well as new car prices to skyrocket. And while they have settled down some from their highs in 2021 and 2022, the price of cars is still up. And that’s something that we cannot affect. It’s not something we can change when it comes to impacting what we pay for automobiles on the whole. But let’s talk about what you can’t control. Obviously, inflation has caused all prices to go up in vehicles. But we can control what type of vehicle, or the manufacturer, or how nice. Let’s kind of jump into what we’re talking about because we’re kind of known for the 20/3/8.
And part of what, when we talk about 20 percent down, three years of financing, no more than three years, and then eight percent of your income, a lot of what we’re trying to capture is that three years. See, you don’t buy more than you can afford. And I think a lot of us have talked about cars are just so outrageously priced. We hear a lot of people talk about thirty-thousand-dollar cars, forty-thousand-dollar cars. I was pleasantly surprised to see you can still buy really nice, reliable vehicles for around twenty thousand dollars. Yeah, Ron, you said it so interestingly. You said that in the start of your journey, when your journey’s beginning, you really just need something that’s reliable, something that is dependable. And so, for most consumers, they think, “Okay, base-level entry-level, beginning, bottom level, that’s where I ought to start.” However, the base-level model is not equal across all brands. And here’s what I mean.
If you look at the entry-level sedans of different types of automobiles, a Toyota Corolla MSRP, according to the Toyota website, comes in just like you said, right around twenty-two thousand dollars. Honda Civic, twenty-four thousand. Those have become more expensive over time as we’ve seen prices increase, those prices have increased. You can’t control that. What you can control, though, is you say, “You know what? Hey, I listened to the Money Guy show. They said I just need a reliable car, entry-level, base level. I’m gonna go to base-level Mercedes. That’s what I’m going to be in. I’m gonna get the three series, not the five, not the seven. I’m gonna get the three series.”
What you don’t realize is that that decision can have you huge impacts because the Mercedes A-Class right now, MSRP is almost thirty-four thousand dollars. And a BMW 3 Series is almost forty-four thousand for the entry-level model. So, this is the part where when I want to talk about when you, when we give you 20/3/8, the bridge to help you navigate how do you have reliable transportation, we don’t have a lot of jingle in your pocket, we’re thinking more Civic. And it’s definitely not luxury vehicles, that is for when you get to step eight of the financial order of operations. But here’s the good news, because a lot of you are like, “Okay, I hear this 20/3/8 talked about all the time. I hear other content creators talking about it. Can you guys actually show me the numbers, help me navigate this?”
We have a great resource. If you go out to our website, moneyguy.com, I want you to go up to the search bar and just type in 20/3/8. We have a 20/3/8 hub that is going to help you. It’s got a calculator, it’s got resources. This is the type of stuff that’s going to help you make the right decisions in your vehicle purchase. And if you want something to take it even a step further, you can go out to moneyguy.com/resources, and you can buy our car buying checklist. So not only will the 20/3/8 calculator help you figure out how much you can afford, this car buying checklist will actually help you make sure you’re making that decision as responsibly as possible.
You cannot control how automobile prices increase through time, but you can control how you participate in that, the type of car that you buy, and the way that you buy that car. And if you do that well, even you can overcome inflationary pressures in this type of environment. So make sure you take advantage of both of those free resources, the car buying checklist as well as the 20/3/8 hub. I think you’ll love the work we put into that, and it will also help you make better decisions.