R.I.P. New Cars Priced Under $20,000
Remember the days when cars were affordable? What a far-away memory that is. The days of finding a new car for under $20,000 seem to be behind us, as the average price hit $45,000 in September. Are there any new cars available for $20,000 or less anymore? A few, but most of the options are small and offer drivers the bare minimum.
New car prices keep going up and small cars are out
A while ago, when gas prices were raging, small cars were the most popular vehicle on the lot. Giant SUVs like the Hummer and Chevy Tahoe were out, and small sedans like Toyota Yaris and Ford Fiesta were in. But these days, the market is back to loving huge trucks and SUVs.
However, there has been a massive shift toward electric vehicles. In addition to that, the COVID-19 complications have made the new car market even more tumultuous. Supply chains are messed up, semiconductor chips are in short supply, and facilities have trouble staying open among staffing issues.
All of these things combined have mostly killed off any vehicle that might have cost under $20,000. There are a few available, such as the Chevy Spark, which starts at $13,600. But is anyone out there seeking out a Chevy Spark?
With supply chain issues, automakers are prioritizing more expensive cars
In some cases, automakers sacrificed less popular and cheaper cars for more popular vehicles. The 2022 Toyota Tundra was prioritized over other cars for the brand when production was cut. These vehicles generally cost more, which has helped the average price of new vehicles to go up.
The cheap cars such as the Yaris, Fiesta, Ford Focus, and Chevy Sonic were not profitable anymore. Automakers are focusing on the more expensive vehicles that can be produced to make up for the lack of sales. Buyers have shown more interest in SUVs and larger vehicles in recent years. If no one is buying small cars, it makes sense to cut these from the lineup.
The price of used cars has also gone up due to a lack of available new automobiles. The average price of a used car is now around $28,000, Automotive News says.
“The pendulum has swung so far into the pricier vehicle categories that we may see a swing back a bit. But perhaps we will see different body styles in the cheaper categories, like the Ford Maverick, rather than the compact car.”Jessica Caldwell | Automotive News
Caldwell went on to say that with autonomous vehicles and high-tech electric vehicles on the rise, offering chapter options is going to get harder for automakers.
What new vehicles are still available under $20,000?
A manual 2022 Subaru Impreza is only $19,755 with no other options added. However, the automatic CVT transmission is $1,300, which puts buyers at $21,055 with no other available options. A bare-bones Impreza is only a little depressing, but at least you can choose the exterior color.
The easy choice would be the new Ford Maverick, but it isn’t that easy. The Maverick costs $21,490 with the shipping fees. The Kia Soul used to run sub-$20k, but now it will cost $20,365 with shipping. Pretty close, but not under the limit. A Kia Rio will run under $18,000, and so will a Chevy Spark. The Nissan Versa comes in under $20,000 as well. So there are options…just not very many.
For now, buyers should prepare to pay more for both new cars and used cars. It could be a while before vehicles are affordable again. Plus, automakers seem to be switching to a subscription-based plan. This might make cars more affordable at first glance but will likely cost more monthly for features that automakers generally would include in the MSRP.