Want a New Affordable Car Under $25,000? Only a Few Are Left
Are there even any new cars left in 2023 with affordable prices below $25,000? Yes, there are a few, but they’re dwindling fast. With the way car prices have shot up, it’s surprising there are any at all. So in 2023, there are 10, down from over 30 just a few years ago.
The average price of a new car has shot up to almost $50,000, made up mostly of trucks and big SUVs. Cars, as in hatchbacks and sedans, are dwindling due to a lack of popularity, and those are the two types of cars that mostly fall under the $25,000 threshold. There are two SUV crossovers, however.
Are these new affordable cars big sellers?
Here’s the list according to Cox Automotive, which are average prices and not base MSRPs.
- Chevrolet Spark: $17,244. 13,708 sold in 2022.
- Kia Rio: $18,962. 27,065 sold in 2022.
- Mitsubishi Mirage: $19,300. 15,814 sold in 2022.
- Hyundai Accent: $19,503. 17,823 sold in 2022.
- Nissan Versa: $20,262. 13,399 sold in 2022.
- Kia Forte: $23,005. 97,303 sold in 2022.
- Kia Soul: $23,349. 56,740 sold in 2022.
- Hyundai Venue: $23,714. 27,094 sold in 2022.
- Nissan Sentra: $24,098. 77,124 sold in 2022.
- Toyota Corolla: $24,978 222,216 sold in 2022.
The two juggernauts on this list are the Nissan Sentra and Toyota Corolla, barely squeaking in just under $25,000. As for the rest, two are being discontinued, the Spark and Accent. The Kia Soul and Forte combined, sell over 150,000 a year. The rest each sell under 20,000 per year.
The future looks cloudy for new affordable cars in general
Affordable cars in general are on life support. And these bargain basement models will see fewer models under $25,000 next year if prices continue to rise as they have the last two years.
With the Accent and Spark axed after 2023, and the Sentra and Corolla probably whiffing past $25,000 next year, that leaves only six heading into 2024. And interest rates on auto loans don’t look like they’ll be lower this year, at the least. Plus, the fed has already signaled it may bump up interest rates through this year.
All of this means that income earners will be squeezed, which puts them out of the hunt for a new, affordable car. So that lowers sales, giving automakers less of an incentive to continue producing them unless you’re Toyota and Nissan.
What about new affordable EVs?
And automakers have not been motivated to develop entry-level models since they make far less than they do with luxury offerings. Cox says that 25% of cars sold in December 2022, cost more than $60,000. So the demand and ability to sell more luxury and performance models make little sense for auto manufacturers.
However, now that many have released high-end EVs, the next big market for EVs is affordable models. But these still won’t be near $25,000. So they’re “affordable,” but only within the context of all-electric models. That means it won’t be long before affordable means under $35,000, a big leap, for sure.