This Is the Only New Car You Can Still Buy for Under $20,000
The sub-$20,000 car is nearly extinct. New cars starting under $20,000 have all but disappeared following massive price increases over the past five years and a decline in the manufacturing of budget vehicles. There's only a single vehicle left under that price for the upcoming model year — and its days are numbered too.
Mitsubishi recently confirmed the Mirage, which starts at $16,695, is being canceled and will not be included in the Japanese automaker’s 2025 lineup.
The Mirage gave buyers “a way to get a new car under warranty for comparatively little money,” but it was loud and slow with the lowest horsepower engine of any gas-powered car, according to Kelley Blue Book.
With the discontinuation of Mitsubishi's subcompact hatchback, there will only be one vehicle left that you can buy new for less than $20,000: the Nissan Versa, a subcompact sedan that starts at $16,680. And according to the trade publication Automotive News, the 2025 model year will be the Versa’s last before it is also discontinued.
Cheap cars are disappearing from the market
In 2019, car shoppers had a range of options of cars with starting prices under $20,000, including still-popular models like the Honda Civic, Toyota Corolla and Volkswagen Jetta.
At that time, about 7% of new cars were sold for less than $20,000, but the share had dropped to just 0.5% as of February 2024, according to Edmunds.
The decline of the sub-$30,000 car has also been stark: Only 18% of new vehicles sold for less than that amount in February, down from 43% in 2019.
Why? Vehicle parts and production costs have increased, for one thing. But automotive experts say the trends also relate to a shift from manufacturers toward producing more high-end cars.
Lower-income customers are struggling to afford new vehicles with auto loan rates averaging nearly 10%, so automakers are catering to buyers with better credit who tend to want more bells and whistles.
The average transaction price of a new car was $48,401 in July, an $11,000 increase from five years ago.
Similar price trends have spilled over to the used vehicle market. According to a new report from Car Commerce, the parent company of Cars.com, used cars under $20,000 have much more mileage than they used to.
“Notably, used vehicles priced under $20,000 now carry an average of 93,000 odometer miles as of July 2024, up 33% in the last five years,” the report said.
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