Looking for a new car under $20,000? Good luck. Your choice has dwindled to just one vehicle

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Searching for a new vehicle costing less than $20,000 in today’s market? Your options are severely limited. The array of choices has shrunk to a singular offering: the Mitsubishi Mirage.

Half a decade ago, budget-conscious automotive consumers in the United States had the luxury of selecting from nearly a dozen new small vehicles priced under $20,000. As of now, only the Mitsubishi Mirage remains in this category, and even this model is nearing its end, seemingly destined for discontinuation.

The current inclination of the American population towards more expensive SUVs and trucks has left the Mirage standing alone as the only new vehicle with an average sale price under the $20,000 mark, once an unofficial benchmark for affordability. The sharp rise in prices for both new and used vehicles since the advent of the pandemic has rendered this price point nearly obsolete as a starting figure for a new car purchase.

The Mirage, available in both sedan and hatchback configurations, arrived in U.S. dealerships ten years ago and was sold at an average price of $19,205 just last month, as reported by Cox Automotive. Though there are other models with starting prices below $20,000, after adding in the cost of options and shipping, they exceed this amount.

Selling at less than half the cost of the average new vehicle in the U.S., which now stands just over $48,000—25% more than pre-pandemic levels—the Mirage symbolizes an affordability that seems to be fading away.

Buyers like Karen Schaeppi of suburban Minneapolis, who recently purchased a Mirage for about $19,000, find themselves surprised by the lack of small car options. Even though she could have afforded a more expensive vehicle, her preference for a small car was motivated by visibility over the hood due to her height.

The lack of small cars in dealerships helps elucidate why new vehicles are so expensive. Major automakers like General Motors, Stellantis, and Ford began to abandon the small car market around five years ago, a decision mirrored by Toyota and Honda later on.

A global shortage of computer chips, exacerbated by the pandemic, coupled with a sudden shortage of vehicles during a period of high demand, has led to soaring prices. Adding to this is the fact that 32 models in the U.S. now have selling prices above $100,000, compared to just 12 in 2018. Even most used vehicles, with an average sale price of $29,000, now cost more than a new Mirage.

This situation has left individuals like Andrew Lang of Flint, Michigan feeling unable to afford a new car, even the Mirage. Other potential buyers are forced to turn to the used market, where prices are high and options are limited due to the scarcity of new small cars sold in recent years.

The Mirage, with a warranty and fuel efficiency among the best in the nation, may not impress in performance or style, but as Richard Herod III, managing partner of White Bear Mitsubishi near St. Paul, Minnesota puts it, “It’s the last honest affordable car in America.”

However, this affordability hasn’t translated into strong sales, and the Mirage’s future looks bleak. Reports indicate that Mitsubishi will cease selling the Mirage by mid-decade, and production in Thailand, where it’s manufactured, is ending.

Once the Mirage is gone, options such as the Kia Rio, Nissan Versa, Hyundai Venue, and Nissan Sentra, ranging from $20,157 to $23,994, will be the next affordable choices. As for the return of the $20,000 new car, experts like Michelle Krebs, an analyst at Cox Automotive, believe it is unlikely, barring unforeseen circumstances such as the entry of a Chinese automaker offering low-priced options.

In conclusion, the disappearance of the sub-$20,000 new car marks a significant shift in the automotive market, reflecting broader economic and societal trends. The situation calls for potential buyers to explore alternatives such as certified pre-owned small cars, which may still offer reasonable prices and warranties. Even though there may be slight drops in new-auto prices as production increases, the era of the $20,000 new car seems to have reached its end.

This report is contributed by journalists Jintamas Saksornchai in Bangkok, Thailand; Yuri Kageyama in Tokyo; and Mark Stevenson in Mexico City.