Recently, I was in the market for a new car. Although I knew buying a used car was much cheaper than buying new, I was sick of dealing with used cars that needed thousands of dollars in repairs.
I was on a strict budget, and many friends and family members told me I was living in a dreamland if I thought I could buy a car for so little.
However, I knew exactly what my money could get me. Because I was willing to sacrifice size and luxury features, I was able to get a car — a new Mitsubishi Mirage hatchback — for less than half what most new cars cost.
If you don’t have a fortune to spend, choosing one of the cheapest new cars available today can be a smart financial decision. You get the reliability and manufacturer warranty of a new vehicle without going broke.
The 10 cheapest new cars
According to Kelley Blue Book, one of the most trusted resources for car owners, the average sale price of a new car in January 2017 was $34,968. Most buyers don’t have that kind of money in the bank to purchase a car in cash. In fact, 86 percent of new car buyers finance their vehicles, reported Experian.
Because most people rely on car loans, buyers are stuck with monthly payments and long repayment terms. For new car buyers, the average loan payment is $509 spread out over more than 68 months. Such a long loan term can add hundreds or even thousands of dollars in interest charges.
But you can dramatically reduce the debt you take on and lower your monthly payment by selecting a less expensive vehicle. Today, cheap new cars can be reliable and safe; you just might have to skip extra features such as a leather interior or premium sound system.
We looked at the least expensive cars available today and ranked them by price. When you review this list, you might think you’ve seen cheaper prices elsewhere. That’s because most manufacturers list the lowest price available, which is usually a car with a manual transmission.
However, fewer and fewer people can drive a stick and only 3 percent of vehicles sold have a manual transmission, reported the LA Times. Because of that issue, our list includes only the prices of cars with automatic transmission.
Here’s our list of the 10 cheapest new cars you can buy right now, all of which are under $20,000.
10. Mazda 3 4-Door Sport: $19,145
When you’re shopping for a car under $20,000, you often have to sacrifice horsepower and interior comforts. However, the Mazda 3 4-Door Sport has one of the most powerful engines on this list with 155 horsepower. It’s still fuel efficient, though, averaging 28 mpg in the city and 37 mpg on the highway.
However, the interior of the Mazda 3 is its strongest selling point. It has features you’d associate with much more expensive cars, such as an air conditioner with pollen filter, push-button start, voice command capabilities, and Bluetooth.
If you’re used to driving larger sedans or SUVs, switching to a compact can be a big transition. You often have to learn how to deal with road noise and more movement on the highway. But the Mazda 3 is larger than many of the cars on this list, and at 2,899 pounds, it has a secure and steady ride.
9. Chevrolet Sonic LS: $17,370
If you want a car that’s compatible with the latest technology, the Chevrolet Sonic LS might be the vehicle for you. The car has the Chevrolet MyLink — a built-in touchscreen system — with Bluetooth capability. It can connect to both Apple CarPlay and Android Auto.
You can skip the adapters; the Sonic has USB ports for your smartphone. And if you’re worried about security, Chevrolet offers a three-month OnStar trial. It even has a rearview camera, which is a standard feature that even more expensive cars often don’t have.
8. Toyota Yaris LE: $17,285
Toyota is well-known for its exceptional quality, and the Yaris upholds its reputation. With style and extra features, the Yaris LE combines performance with efficiency.
Unlike many cars on the list, the Yaris is a three-door vehicle, rather than a four-door. That can take some getting used to, but it has other features that help make up for it, including a rearview camera and touchscreen radio and navigation system.
7. Kia Rio S: $16,100
The Kia Rio S is a good option for someone who prioritizes performance but is on a budget. It has a tight turn radius, so it’s an excellent choice for those who live or work in the city and need to navigate through traffic.
It also has features that you’d expect in a far more expensive car, such as a touchscreen audio system and rearview camera. However, the Rio falls behind a few other inexpensive vehicles in fuel economy, averaging just 28 mpg in the city and 37 mpg on the highway.
6. Smart Fortwo Pure Coupe: $15,990
The Smart Fortwo Pure Coupe is definitely not for everyone, but if you like quirky and cute, it might be for you. It’s far and away the smallest vehicle on the list and, with just 89 horsepower, it has a fairly weak engine. If you do a lot of highway driving and need to accelerate or switch lanes quickly, you might find the Fortwo inadequate.
In addition, it’s size also means that a backseat and cargo space is nonexistent. If you need to transport a lot of groceries or your latest Target haul, this car isn’t a wise option.
However, it’s remarkably fuel efficient, getting 33 mpg in the city and 39 mpg on the highway. If you’re looking for a small compact car that goes far on a tank of gas and fits in congested areas, the Fortwo could work.
5. Fiat 500 Pop: $15,985
The Fiat 500 Pop is cute and sporty. In fact, Kelley Blue Book ranked it as one of the top 10 coolest cars under $25,000 last year.
The Italian automaker designed the 500 to stand out from other subcompacts. It sits lower over the wheels and has a spoiler to improve aerodynamics and add to its sleek appearance. All 500 models have a 5-inch, full-color touchscreen, a media hub, hands-free calling, and more.
Its fuel efficiency is on par with the much smaller Smart Fortwo, but has a more powerful engine and a more fun driving experience.
4. Mitsubishi Mirage G4 ES: $15,595
The Mitsubishi Mirage G4 ES offers a lot of bang for your buck. It’s one of the four least expensive cars out there but offers standard features like rearview camera, Bluetooth capability, touchscreen display, and USB ports. It can also comfortably seat five people and has enough trunk space to tote your groceries around.
Mitsubishi also offers one of the best warranties in the industry; with your purchase, your new car is backed by a five-year, 60,000-mile limited warranty and a 10-year, 100,000-mile powertrain warranty.
However, the Mirage G4 has an anemic engine with just 78 horsepower — the lowest on our list. But on the plus side, that small engine gives you amazing fuel efficiency. It has the best gas economy of all ten vehicles, averaging 33 mpg in the city and 40 mpg on the highway.
3. Hyundai Accent SE Sedan: $14,745
Although the Hyundai Accent SE Sedan is in the top three when it comes to the cheapest new cars, it lacks the benefits of other vehicles on this list.
Averaging just 26 mpg in the city and 36 mpg on the highway, it has one of the worst fuel economy ratings. In addition, it doesn’t have features like Bluetooth or a rearview camera, which come standard in other cars.
However, the Accent does have Hyundai’s excellent 10-year, 100,000-mile powertrain warranty behind it. And it has more cargo space, so it’s a better option for families than some other vehicles.
2. Nissan Versa Sedan S Plus: $14,130
The Nissan Versa Sedan S Plus offers decent fuel economy and more seating and cargo space than most of the other cars listed here. If you need more space but are on a budget, the Versa can fit a family comfortably, even if you include a car seat.
However, the Versa offers the least amount of entertainment and convenience features. The S Plus doesn’t have a rearview camera, keyless entry, or a USB port. It’s a barebones trim that works for families that need a commuting car but don’t want to spend a lot.
1. Ford Fiesta S: $13,660
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Of all of the cheap new cars available today, the Ford Fiesta S beats them all when it comes to price. It also offers comfortable seating for up to five people and 12.8 cubic feet of storage space.
The Fiesta has a respectable 120-horsepower engine, so it has a fun ride that handles highway driving without any problems. It also has features like the SYNC 3 system, which allows you to use Apple CarPlay and Android Auto. You can interact with your phone too, sending and receiving text messages without taking your hands off the wheel.
If you need an inexpensive vehicle that delivers on space and convenience, the Fiesta tops the list of cheapest new cars.
Buying a new car
Buying a new car doesn’t mean you have to be in debt for six years or more. By looking at compact and subcompact vehicles, you can buy a brand new car without taking on a lengthy auto loan. All 10 of the cheapest new cars on this list offer a lot of value for their price, making them a smart choice when you’re on a budget.
If you’re ready to buy, you can time your purchase to take advantage of dealership and manufacturer incentives and save thousands.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|5.49% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|