Why it’s hard to find an inexpensive new car these days — just one model has an average price below $20,000

by | Aug 28, 2023 | Financial

Hero Images | Getty ImagesIt’s getting harder to find new, cheap cars, according to auto experts.Consider this: In July, just one car model — the Mitsubishi Mirage — had an average new-vehicle transaction price below $20,000, according to Kelley Blue Book data. By comparison, there were a dozen vehicles that met that pricing criteria five years ago.The $20,000-or-below barometer is a sort of unofficial price threshold for an affordable new car, said Brian Moody, executive editor for Kelley Blue Book.”There aren’t as many inexpensive new cars as there used to be,” Moody said.More from Your Money:Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.Why you should care about who owns your advisor’s firmYou’re better off buying an index fund. Here’s whyDemand may push advisors to turn to cryptocurrenciesTransaction price doesn’t tell the full story, of course, experts said. That price records what the average buyer pays — a variable that depends on factors like markups and promotions by car dealers and any add-ons selected by buyers at the time of purchase.Manufacturers like Kia, Hyundai and Nissan — in addition to Mitsubishi — currently sell cars whose base models carry a sticker price below $20,000, Moody said.But this list has gotten smaller down over the past five or so years, said Tom McParland, owner of Automatch Consulting, a car-buying service for consumers.”Whether you’re buying new or used, that kind of affordable segment — sub-$20,000 — is challenging,” he said.’Americans don’t like not having features’Consumers were able to find entry-level vehicles with a $15,000 starting price as recently as a few years ago, said Paul Waatti, an industry analyst at market-research firm AutoPacific.The dearth of options today is due to a multitude of factors, experts said. Among them is consumer preferences: People tend to want models with more features, Waatti said.”Culturally, Americans don’t like not having features in their car,” such as automatic climate control, a car play screen and parking sensors, said Joseph Yoon, a consumer insights analyst at car website Edmunds.Auto manufacturers know this to be true — and use it to their advantage in marketing, Waatti said.”Automakers obviously want to be able to tell that they’re offering an affordable vehicle and they can do that in messaging,” he added, “but when it comes down to it, they’re not building many of those lower-price models.” Instead, automakers will make more of the higher-end models with features that consumers want, added Yoon.In fact, car sales in th …

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