Next Year, There May Be Only One New Car Left Under $20,000

It’s the end of an era that no one wants to end.

Published August 5, 2024

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It won’t be long until I can use the following anecdote as shorthand for how old I am: I remember when you could buy a new car for under $20,000.

In fact, that day may have already arrived.

We all know that cars continue to get more expensive, with both new and used vehicles seeing their prices skyrocket more than most other categories during the post-pandemic inflation boom.

New cars have gotten so pricey, in fact, that the $20,000 MSRP benchmark — which for most of this century had been considered the upper limit of the “affordable car” category — may soon be extinct.

Transportation Inflation

1998 was the first year in which the average new car in the United States was priced over $20,000. In 2019, that average cost had ballooned to a hair under $39,000, but you could still buy a sub-compact sedan for well under twenty grand, with the average new car in that category going for just $16,898 that year.

Fast-forward to today and it’s a very different story.

The average new car price in July 2024 was $48,644, which is nearly a $10,000 increase from just five years ago. That’s almost exactly the starting price of a 2024 Cadillac CT4-V, a decidedly luxurious sedan. It is worth noting, however, that prices have actually decreased this year, as the post-pandemic highs in late 2022 and early 2023 saw the average new car price go well above $49,000.

cadillac sedan driving — Remarkably, the $48,690 starting price of the Cadillac CT4-V is just about average for a new car these days.

But even if the current overall trend is down slightly, the most affordable segment continues to suffer year over year. Currently, you can buy four new cars for less than $20,000. They are three sedans, the Nissan Versa, Mitsubishi Mirage and Kia Forte, and one compact SUV, the Hyundai Venue.

But even those slim pickings are set to get a lot slimmer next year.

The Last Car Under $20,000

According to Jalopnik, the Versa, Mirage and Forte are all either confirmed or rumored to be discontinued for the 2025 model year. That leaves the Hyundai Venue as the only new car you can still buy for under $20K starting next year.

But even that may not be as it seems. The Venue’s MSRP currently starts at $19,900, just a sliver below the symbolic $20K barrier. But that price doesn’t include taxes, fees and freight charges, with Jalopnik noting that the freight charges alone will add at least another grand.

Still, we’re talking MSRPs here, and those never include such extra costs. But even if we discount those factors, there’s a decent chance the Venue will still come in above $20,000 next year.

For the 2024 model year, the Venue was one of two SUVs with MSRPs starting below $20,000. The other was the Kia Soul, which started at $19,990. But Kia has already moved onto the 2025 model year for the Soul and, in doing so, raised the SUV’s starting price to $20,290. Once the Venue shifts into 2025 mode, there’s a chance Hyundai — which is the parent company of Kia Motors — could follow suit and jack the price up above that hallowed $20K mark.

Next year is likely to be the last year we see a new car priced below $20,000. Or we could even be in that endgame now. Regardless, when that day comes, it will mark the end of an era.

And I’m pretty confident in saying it was an era that no one wanted to see come to an end.