The sub-$20,000 automotive is almost extinct. Latest cars starting under $20,000 have all but disappeared following massive price increases over the past five years and a decline within the manufacturing of budget vehicles. There’s only a single vehicle left under that price for the upcoming model 12 months — and its days are numbered too.
Mitsubishi recently confirmed the Mirage, which starts at $16,695, is being canceled and won’t be included within the Japanese automaker’s 2025 lineup.
The Mirage gave buyers “a technique to get a recent automotive under warranty for comparatively little money,” however it was loud and slow with the bottom horsepower engine of any gas-powered automotive, in response to Kelley Blue Book.
With the discontinuation of Mitsubishi’s subcompact hatchback, there’ll only be one vehicle left you can buy recent for lower than $20,000: the Nissan Versa, a subcompact sedan that starts at $16,680. And in response to the trade publication Automotive News, the 2025 model 12 months can be the Versa’s last before additionally it is discontinued.
Low-cost cars are disappearing from the market
In 2019, automotive shoppers had a variety of options of cars with starting prices under $20,000, including still-popular models just like the Honda Civic, Toyota Corolla and Volkswagen Jetta.
At the moment, about 7% of latest cars were sold for lower than $20,000, however the share had dropped to only 0.5% as of February 2024, in response to Edmunds.
The decline of the sub-$30,000 automotive has also been stark: Only 18% of latest vehicles sold for lower than that quantity 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 recent vehicles with auto loan rates averaging nearly 10%, so automakers are catering to buyers with higher credit who are likely to want more bells and whistles.
The common transaction price of a recent automotive was $48,401 in July, an $11,000 increase from five years ago.
Similar price trends have spilled over to the used vehicle market. In keeping with a recent report from Automobile Commerce, the parent company of Cars.com, used cars under $20,000 have rather more mileage than they used to.
“Notably, used vehicles priced under $20,000 now carry a median of 93,000 odometer miles as of July 2024, up 33% within the last five years,” the report said.
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