As car buyers’ preferences have changed, more expensive cars have become the norm at dealerships, leaving budget-conscious shoppers with fewer affordable models to choose from.
Edmunds said $20,000 new cars have all but disappeared, accounting for just 0.2% of new car sales in 2025. The share of products sold for less than $30,000 also plummeted from 40% in 2019 to just 15%.
Ivan Drury, director of insights at automotive research firm Edmunds, says inflation is only part of the story. New car buyers increasingly prefer SUVs and pickups, along with higher trim levels that offer more technology and comfort features. As a result, automakers have less incentive to produce cheaper, entry-level models.
“If a $70,000 car is flying off the lot while a $20,000 car sits there too long, why inventory a $20,000 car?” Drury says.
This dynamic has reshaped the affordability of the new car market. Today’s entry-level cars have more features than ever before, but shoppers looking to save money have fewer options than they did just a few years ago.
What are today’s affordable new cars like?
Budget-conscious buyers are still buying affordable new cars, but the market isn’t what it used to be.
In 2019, the largest share of new car buyers was in the low-to-mid $20,000 range. Edmunds said the highest concentration of purchases right now is between $30,000 and $35,000.
According to Edmunds, the lowest average transaction prices for new cars as of 2026 are as follows:
Nissan Versa: $21,047 Nissan Kicksplay: $22,669 Kia Soul: $23,560 Hyundai Venue: $23,757 Toyota Corolla: $24,916 Hyundai Elantra: $25,040 Nissan Sentra: $25,161 Chevrolet Trax: $25,826 Kia K4: $25,858 Volkswagen Jetta: $26,519
The most affordable new cars are primarily compact sedans and subcompact crossovers.
Many inexpensive models that once supported the entry-level market have been discontinued, including the Chevrolet Sonic, Ford Fiesta, Hyundai Accent, and Honda Fit. Drury said automakers are increasingly shifting to larger vehicles and higher trim levels because they are more profitable.
The good news for buyers is that vehicles across the market, even the cheapest models, are far better equipped than they used to be, Drury said.
“If you bought a Camry in 2017 and you bought the same one in 2026, you would have a vehicle with a significant level of improvement across the board,” he says.
Ashley NeSmith, founder of Ashley the Auto Advocate, says many technology and safety features that once required a step up to higher trims or more expensive models are now standard on many of today’s entry-level cars.
“There are a lot more vehicles available now than there were a few years ago,” she says.
How to shop in today’s market
With the average price of a new car hovering near $50,000, many shoppers are turning to the used car market for better value. Since 2019, used cars have accounted for about three-quarters of all U.S. vehicle registrations, according to S&P Global Mobility.
Drury said cars that are three to five years old have a good balance of price, depreciation and modern features, but the low supply of unleased cars keeps prices higher than many buyers expect.
According to Edmunds, the average price of a new Toyota Corolla is about $25,000, but a three-year old model costs about $20,000, and a five-year old model costs about $16,000.
However, it does not mean that buying a new one is a wrong choice. For some buyers, it may be worth paying extra for the latest model.
Nessmith says buying a new car can still be the right financial decision for people who plan to keep their car for many years due to warranty coverage, lower initial maintenance costs, and manufacturer financing incentives.
But Jeff Judge, a certified financial planner with Chesapeake Financial Planners, says buyers should avoid extending their auto loan just to buy a more expensive car to fit their budget.
A longer loan term will lower your monthly payments, but the cost of borrowing will also increase over time, and buyers could end up owing more than the car is worth if they decide to sell or trade in the car before the loan is paid off, he says.
Do you want to get ahead at work? Next, you need to learn how to make effective small talk. In CNBC’s new online course, “How to Talk to People at Work,” expert instructors share practical strategies for using everyday conversations to increase visibility, build meaningful relationships, and accelerate career growth. Sign up now!
