In just a few months, there will be no new cars available on the market priced under $20,000. This significant shift is indicative of the ongoing changes in the automotive industry, where affordability is becoming increasingly rare.
The only remaining subcompact vehicle, the Mitsubishi Mirage, is officially discontinued in the U.S. market, with the 2024 model marking its final production year. This decision reflects the manufacturer’s adjustment to changing consumer demands and market trends.
According to a recent report by Kelley Blue Book, there are fewer than 1,700 new Mirages still available nationwide. Data from Edmunds reveals that as of Wednesday, only 691 units of the under-$20,000 Mirage remain for purchase. This scarcity highlights the stark reality of the current automotive landscape.
“At the current sales pace, the last vehicle priced under $20,000 is predicted to disappear by the end of summer,” Kelley Blue Book emphasized in their report, underlining the urgency for budget-conscious consumers.
Just a few years ago, in 2019, popular models such as the Honda Civic and the Toyota Corolla were available at manufacturer’s suggested retail prices (MSRPs) under $20,000. However, that era is now behind us, leaving many budget-conscious car buyers struggling to find suitable options that fit their financial constraints.
Brian Moody, the executive editor for Kelley Blue Book, shared insights with Money, stating, “Fewer price-sensitive buyers will find a new car that meets their needs.” He further noted that this situation may force consumers to finance vehicles that exceed their budgets for extended periods, making monthly payments appear more manageable but leading to long-term financial strain.”
While shoppers may reminisce about the time when they could easily purchase a new car for less than $20,000, the Mitsubishi Mirage itself is not likely to be missed. The model has faced considerable criticism from automotive reviewers, including Consumer Reports, which remarked, “Mitsubishi’s tiny, Thailand-built subcompact seems like an act of desperation, dressing a primitive Asia-market car with some upscale toys and calling it a day.” The review pointed out issues such as the weak three-cylinder engine that delivers sluggish acceleration, clumsy handling, and a cabin that feels disappointingly low-rent.
The Mitsubishi Mirage has also struggled with sales, according to Kelley Blue Book, which recorded a sluggish pace of just over 1,000 units sold per month. Despite the lack of competition in the new vehicle market under the $20,000 threshold, many budget-conscious shoppers tend to prefer used cars that offer larger sizes and additional features.
“Many of the 2024 Mirages have been on dealer lots for over a year, and it’s likely that some have even sat for more than two years,” remarked Ivan Drury, the director of insights at Edmunds. “If there were a genuine market for them, they would have been sold by now.”
This raises an important question: What are the options for car buyers with limited budgets?
Drury suggests that these consumers may have to either maintain their current vehicles, settle for used options, or explore alternate modes of transportation altogether. This situation underscores the challenges faced by those in search of affordable vehicles.
Aside from the Mitsubishi Mirage, there are a few other cars occasionally priced below $20,000, such as discounted base trims of the Kia K4 and Kia Soul. Additionally, the Nissan Versa, another subcompact sedan, is set for discontinuation after 2025. However, it’s worth noting that the average transaction prices for these vehicles typically exceed $20,000.
Surveys consistently reveal that Americans desire more affordable cars, yet manufacturers have been phasing out subcompact budget models in recent years due to a noticeable lack of consumer interest at dealerships.
Driving a smaller car can feel unsafe in the U.S., where large trucks and SUVs dominate the roads. Moreover, features such as remote start and ventilated seats have become essential for many buyers, further excluding base models of the cheapest new vehicles from consideration, as Drury points out.
Nevertheless, the disappearance of cars priced under $20,000 holds significant implications for the niche of consumers who have historically gravitated towards them.
Moody commented, “The gradual decline of sub-$20,000 vehicles has a cumulative impact. Cars like the Chevrolet Spark, Ford Festiva, Hyundai Accent, Mitsubishi Mirage, and Nissan Versa are no longer available as new options. While there are decent alternatives, the prices are likely closer to $26,000. Furthermore, with the prices of used cars already on the rise, increased demand will not favor bargain hunters looking for affordable options.”
In the under-$30,000 price range, Moody notes that there are a variety of good choices available, including reliable sedans like the Nissan Sentra and the Volkswagen Jetta.
When asked whether sub-$20,000 vehicles could make a comeback, he suggested it is a possibility if a startup or foreign brand decides to pursue this segment. “The absence of low-priced new cars could present an opportunity,” he added. “In Europe, affordable models like the Renault Clio, Toyota Aygo X, Dacia Logan, Dacia Sandero, Citroen AMI, and Fiat Panda thrive. Could similar models succeed in the U.S.? Stranger things have happened.”
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