Commentary: Do You Really Cheap Cars Now?

So, we now want “cheap cars” again.

Let’s start with a reality check. The average transaction price for a new vehicle in the USA reached over $49,000 at the end of 2024. There is only one vehicle sold in this country that starts at under $20,000. These prices have taken a steeper climb since before the COVID-19 Pandemic.

With auto loan rates and average monthly payments at levels never thought would be possible, here we are. 

Yet, there is a train of thought that if we start offering “affordable” vehicles again, the automotive industry and our economy will ride through the trade wars and rising rate of inflation. 

It is not that easy to accomplish. It takes time, capital, sacrifice, trade negotiations, and a hard look at the economics of affordable vehicles to even make a plan towards doing so.

There are plenty of points to be made here. Simply because there is a misunderstanding on how the industry works. Let alone the basic theories and practices that were studied in Business 101 and Economics 101. 

We’re dealing with a pipe dream that is not completely rooted in reality. Perhaps I should explain the challenges in reintroducing cheap vehicles to the USA market. Or, at least try to. 

One cannot flip a switch and sell an affordable vehicle. It takes planning, engineering, design work, provision of production capacity, supply chain considerations, and market research to properly introduce a new vehicle to the marketplace – regardless of price. All of this takes time – more than a few years in some cases.

There may be some who point to a vehicle in, say, Chevrolet’s Mexican lineup and could consider at importing it across our border. First off, you already have a tariff looming on it. Plus, you also have to make sure it meets Federal and California Air Resources Board emissions standards, along with Federal crash protection standards. 

You could also ask about importing vehicles from China. That’s a loaded topic, since the industry would rather not welcome competition from our primary economic foe. Plus, there are tariffs in place against Chinese imports. 

You can also add importing affordable vehicles from India, Thailand, Indonesia, and so forth. Still, reciprocal tariffs may be a challenge – at least one of them. 

I went through these quickly to knock out the arguments that are pervasive in conversation circles lately. You get to the point where these arguments and refutations become old and tiresome. It’s not that they are viable and logical solutions that could see some real momentum. I fear that the timing would be wrong, if they are executed. 

We just entered into a new world of governance and economic concern. While the demand is there for such inexpensive new vehicles, fulfilling that demand has become trickier than before. 

However, it is possible for our automotive market to sell more affordable vehicles. Not to de-content them at sell that at a lower price but also offer good value for money. That equation should be met with what consumers really need and want in terms of practicality, passenger space, features, safety, competent performance and efficiency. 

It does not have to be a battery-electric or hybrid vehicle, either. You can accomplish these targets without having to attach a drive battery to the driveline. As long as it meets Federal and CARB emissions standards – still a key caveat to consider.

Yet, we should always look at what’s available now in terms of 2025 model year products. The 2025 Nissan Versa starts at over $17,000 with its sportier model – the SR – starting at just over $21,000. The 2025 Nissan Kicks starts just several hundred of dollars more, as does the 2025 Nissan Sentra. The 2025 Hyundai Venue starts at just over $20,000. A 2025 Kia Soul is available for a few hundred dollars more. The hot 2025 Chevrolet Trax starts at $20,500. And, the 2025 Volkswagen Jetta S starts at just under $22,000. 

Sadly, these are not the vehicles we really want. However, they are also some of the hardest one to find at any given dealership. It’s an interesting dilemma that’s been swirling at the top of our minds. 

Inexpensive vehicles do exist. However, that baseline has increased over the four-to-five year span since we had to curtail basically everything enabling our economy to go sideways. 

There are a few solutions, however. Sadly, there are also arguments against them that would thwart the smartest ideas on here. 

All photos by Randy Stern