Whatever Happened To The Affordable New Car?

Forbes

a day ago

New vehicle prices are showing no end to their meteoric rise, with the average manufacturer's suggested retail price (MSRP) now standing at over $51,000, according to Kelley Blue Book. That represents a 2.3% boost over the past year and is well over $10,000 more than the average car cost in 2020. And there's still no telling how much new-vehicle prices will increase moving forward with President Trump's tariffs being levied on imported cars, steel and components.
Aside from inflation and changing market forces, today's stratospheric new-vehicle prices can be attributed to how they're being equipped. The days are long gone since an 'economy car' meant one that came with manual locks, roll-up windows and just an AM/FM radio. Today it's tough to find a given model on a dealer's lot that isn't loaded with profit-padding perks that were until only recently limited to top-shelf luxury cars.
With the Kia Rio and Mitsubishi Mirage having left the U.S. market the number of cars that start at less than $20,000 is down to just one, the Nissan Versa at $17,190, though one would be hard-pressed to find a base model with a manual transmission in a given dealer's inventory.
What's more, Cars Commerce reports that the number of new vehicles selling for under $30,000 is now down to 13.6% of the market as compared to 38% in pre-pandemic 2019. And since 92% of the lowest-stickered vehicles are imported, there's likely to be even fewer sub-$30,000 models up for grabs in a tariff-tempered economy.
If the Future Attribute Demand Study (FADS) conducted by the research firm AutoPacific is any indication, automakers may need to return to the days of basic transportation by building more models and trims that eschew some flashier new-vehicle features for the sake of maintaining more-reasonable MSRPs.
The company surveyed over 14,000 new vehicle intenders to gauge their interest in more than 160 current automotive features and found that shoppers looking to spend no more than $35,000 on a new vehicle are less likely to demand widely offered upscale features than more affluent buyers.
'Front wheel drive, base stereos, cloth seats with various manual adjustment, and analog gauges are 'in,' for these more frugal shoppers,' says Robby DeGraff, AutoPacific's manager of product and consumer insights, 'so the array of standard equipment found on entry- and mid-level trims of today's popular vehicles within the $25,000 to $35,000 price range may need to be reexamined as consumers tighten their belts in the face of economic uncertainty.'
The study determined that more price-conscious consumers remain open to consider a conventionally powered sedan that sticks close to the basics, with cloth upholstery, manual seat adjustments, an analog gauge cluster and easy-to-use physical buttons and dials. They say they can do without navigation, elaborate interactive displays and nearly-autonomous driving features. Those who can afford more than $35,000 say they favor more-fanciful amenities like driver profile settings, a household 110v outlet, and rear-window sunshades.
On the other hand, shoppers in both price ranges said they items like want wireless charging pads, heated and ventilated front seats and potentially life-saving active safety features like automatic emergency front and rear braking and lane- change assist. The least sought-after features among both groups include premium-branded audio systems, head-up displays and subscription-based immersive services.
While market demands may trigger a renaissance of more basically-equipped new cars, trucks and SUVs for the sake of cash-strapped buyers, don't expect to see crank-up windows, front bench seats, cigarette lighters or steering-column shifters returning to the market any time soon.
In the meantime, here's a list of the new cars and SUVs for 2025 that can still be found starting for less than $25,000, not including the destination charge, taxes, fees and options: