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.

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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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