Buying one of the least expensive cars will help you build greater wealth over time. A car is a money pit. You could use that money to invest instead!
If you are in the market for a new car—and have ruled out buying used for whatever reason—and you are on this site then you are probably concerned about getting the best deal possible.
After all, nobody wants to overpay. Even a financial fool appreciates knowing that the value they’re getting from their purchase is up to par and that they didn’t make an embarrassing deal.
It is imperative that you strike a compromise between affordability and practicality if you’re looking for a set of bargain wheels. This has been said a million times in the past, but the current offerings of both foreign and domestic automakers makes this easier than ever.
Many Americans are turning towards cars that can be bought for relatively cheap but still want something new and something that has the basic comforts and amenities we’ve grown accustomed to.
Everyone’s situation is different, but purchasing an inexpensive car is a great idea for if you need a second car or a commuter; or you simply need a cheap car period.
If you’re looking for your primary mode of transportation for you and the family though, it’s best to err on the side of a larger car than having to buy another one down the road when finances improve or you outgrow it.
The Least Expensive Cars
1) The Hyundai Accent is an inexpensive but reliable car that can be bought for around 10,000-$12,000. This car is great for people that need a decent form of transportation they can count on without worrying about it breaking down.
Long gone are the bad Hyundai stereotypes of unreliability and such. With the low price tag comes a few sacrifices, however. No car at this price will not come loaded, and features such as a sun roof, nice wheels and paddle shift transmission are absent.
However, the car is not totally deprived of options. A peppy 110-horsepower engine is standard, along with safety features such as a low tire pressure indicator and seat belt pre-tensioners. If you are looking for the least expensive vehicular option to point A to point B, the Hyundai Accent is a viable option. (Official Hyundai pricing and Specs at Automotive.com)
2) The Nissan Versa can be bought for just slightly more than the Accent, but offers a few more options.
The inexpensive Versa will come with things such as power windows and power locks, and it is a larger car.
However, the downside of buying an absolute base Versa is that things such as a CD stereo system and air conditioning are not included. Pay a grand or so more though and you’ll get it.
In addition, the color choices on the basic Versa are limited to just blue, silver and black. Overall the good news is that if you are willing to pay a few extra dollars you can get more features for not that much more money. Plus, it’s a larger car than the Accent.
3) The Chevy Aveo is GM’s entry-level car and costs under $13,000. The least expensive Aveo’s do not include many options, however, they do come with a stereo system as well as a few nice colors that you can choose from.
The all-new 2012 Aveo will be a completely revamped model, so if you’re planning on getting a deal now, go for the 2011 and take advantage of the discounts and incentives. You may be able to get a 2011 2LT model with MP3 player, XM radio and keyless entry today for the price you would have paid for a base model last year.
4) Next up, the Kia Rio. It will cost right around $13,000 for the base model sedan. This Rio, however, is devoid of any and all options.
The base model does not include a stereo, air conditioning or even floor mats. In addition, the color choices are very limited. For the price you would pay for a stripped down Rio the sensible thing to do would be to purchase a Hyundai Accent that included a few upgrades.
Since the Rio is so stripped down it would take an additional $2,000 dollars or so to get the car with some decent upgrades in it. The car is decent sized however, larger inside than the Aveo and the Accent and with more cargo room. (All new Kia prices and dealer quotes at Automotive.com)
5) Finally, the last on our list is the Toyota Yaris, though certainly not least. Offered as a sedan or three door hatch, this little Japanese import packs more base features than any of the aforementioned.
For the price of $14,000 it’s one of the best deals, especially when considering the versatile interior and customizable ordering options.
However, the Yaris rides on the shortest wheelbase in its class, and has smaller cabin room than the offerings from Korea and the U.S. When buying any Toyota though you’ll for sure know that you are getting a reliable vehicle that will stand up the test of time. All Toyotas are well made and have a reputation for reliability. The Yaris is no different.
Burnt Rubber
With gas prices regularly over $4 a gallon now, you'll appreciate these inexpensive, fuel sippers. Our European brothers and sisters pay US$8+ a gallon for gas and if you ever go, you too, will start to appreciate the beauty of small vehicles.
The above five cars are perfect for one's budget, especially if you follow the 1/10th rule for car buying. You probably aren't going to be turning many heads and picking up babes with these cars. But, what you will turn is a new page in your journey towards financial freedom.
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Updated for 2021 and beyond
Wow, I must talk to my husband to let me buy a Toyota Yaris. Thanks for the information!
Talking about the difference between driving a small car and a big car – I remember having to drive my friends’ old Mercedes when they went overseas because I was baby-sitting and house-sitting for them. When they returned I went back to drive our own car and I felt like I was driving a toy. I guess Mercedes is much heavier, and maybe that’s why it’s safer. We have had a BMW before, but I didn’t like it because it was too difficult for me to shift the gears.
I love the Toyota Yaris! So cheap and economical. Automotive.com has some good info. I hear you on going from a European mid-size car to a Japanese economical car. So much lighter it often times doesn’t feel safe! Moose is VERY heavy and feels very safe.
I couldn’t imagine going that small! I think there is a new 1 series from bmw that just came to America that is TINY also
I am loving my new Ford Escape and the 27 mpg. I am sure that doesn’t sound very high to some, but for carting 5 people around, it is great. Plus, I have found Ford to be quite reliable in recent years!
Wow…I have sticker shock! My first car was $1300 cash. My second car was $1500 cash, and my current truck was $3500 cash.
Granted…my husband had purchased a mustang after getting out of the Navy in 2007 (boy that was fun paying off:)).
I rented the Hyundai Accent last week on a business trip and found it to be a pretty nice little car.
My mom has the Nissan Versa and I don’t find it comfortable.
I know these vehicles get great gas mileage…but i wonder if you give up safety though. Smaller cars cant be as safe as many larger ones…maybe Im wrong though
The least expensive car to me is one with no payment! I love having no payment on both cars. We have a lot of friends leasing or paying high monthly payments on two cars equivalent to a mortgage! It’s crazy. I’m driving mine into the ground and my wife…well, I’ll try to convince her to do the same but I may only get 10 years out of her van.
Good point! I like that attitude. Very PF frugal style! What is your car u are rocking?
The Versa looks pretty good out of those 5. All the other ones are too small for us. :)
I guess we got brainwashed by the car company as well. We need a bit bigger car for the little guy.
I’m curious if our habit will change once gas reach $10 though. If everyone drive a smaller car, we wouldn’t have to worry so much about getting into an accident with a behemoth Ford F350.
If gas goes to $10, there will riots on the street Joe! Yes, if everyone had a mini car, I’d feel much safer for sure.
I have a 2003 Chevy Malibu (and yes, I do get made fun of…), it’s paid off so it’s cheap from that standpoint, however since it only gets about 20 mpg on the highway, I have to wonder with gas prices so high that it might be to my benefit to buy a smaller more gas efficient model of car anyway. I wonder how long it would take me to recap my cost on a newer (or newer used) car.
Based on a quick guesstimate, I think it would take me 8 years before I would break even from a gas perspective only.
Like Krantcents, I guess I will stick with my 8 year old (but fully paid off) car.
Although I can’t afford one, I do like the looks of the Chevy Volt… It would get old plugging it in every day though, especially in winter. And at a present cost of $40,000 it would definitely violate the 1/10 rule you mention above!
Hey, don’t knock the Malibu Don! Good job having it paid off. Such a no brainer not to have payments on a depreciating asset. The longer I have Moose, the more I love him. Weird huh? I’m thinking it might be the same for you guys.
Until hybrids and total electric vehicles match the price of regular gas econo cars, they really quite uneconomical. And if one doesn’t detonate one’s old car when buying the new car, then one is adding pollution to the environment.
Thanks for the information, however I am hanging on to my 16 & 14 year old cars forever! I love no payments on a depreciating asset!
Planning on getting around by foot and bus for the rest of this year myself. Am a fan of the sporty, compact cars like the Yarris and Accent, especially for city driving and parking. Scary how gas prices are sky rocketing again.
where does the smart car rank? does the Tata Nano count?
Sorry Sunil. I wouldn’t be caught dead in a Tata Nano! Well actually, I could probably easily die in one!
Smart cars are like $16,000 for the average model. That’s a full 2-3k, or 20% more expensive.
The Versa looks awesome and can be had for a great price too!
It does look awesome, but the one I chose has probably like $10,000+ in aftermarket additions! lol.
It’s crazy what the Europeans have to pay for gas. The funny thing though is when I was in Italy and Switzerland 15 years ago I would say that 1 out of every three cars was a Mercedes or BMW. I’m sure that’s not typical everywhere in Europe, but I was amazed athow common place it was at the time…..I suppose they are a little cheaper overseas, but can’t be that much cheaper….although, I’ve always been tempted by that BMW offer to get a free trip to Germany to pick-up your car…..if only I wanted one. I think I’d be happy with any of the cars on your list though.
I like those A-Class Benzos and stuff. Always get hooked on the small cars when I Come back from France especially.
I am totally tempted to go to the BMW factory and do that whole thingy and watch it get built and drive the Autobahn! Maybe one day!
Drove on the autobahn last year from Bonn to Grindelwald, Switzerland (about 700 km or 420 miles).
There are speed limits on the autobahn until you encounter an interesting sign:
It is a normal rectangular white road sign with a circle and 3 diagonal slashes through it. Basically it means that all previous rules are now no longer in force.
As soon as you pass the sign you can hear all the engines revving up as all the cars around you start flooring it- it is pretty fun. Unfortunately I was in a rented Skoda that only did a top speed of 180 km/hr (112 miles per hour)- had it floored the entire timme in 5th or 6th gear. German cruise control- just floor it.
-Mike
A rented Skoda on the Autobahn……………….. I am seriously shaking my head!!! :)
Don’t shake your head- it was like a mini SUV. A rented BMW or Mercedes was about 3 times as much as the Skoda… anyway, most cars you rent in Germany will go in excess of 100 MPH, unless it’s a Smart Car!
I really dig the European styling and like the way most of the cars are standard shift. Also the cars get much better gas mileage- I remember in England the Ford Mondeo diesel was gettin 55 miles a gallon using a stick shift- and it was really fast… too bad Americans can’t get this.
Great post. Right now I’m leasing a car at $231 a month. That $8,316 over 36 months, and I won’t have anything to show for it once I turn it in. For just a little bit more, I could own a car forever. Assuming there are similarly priced new cars when I turn in my lease, I’ll take a strong look at these.
At least you will have peace of mind that after the 3 years is up, you won’t have to sell it or do something with it!
Out of the all the cars I’ve had, I’ve never leased, probably for your exact same reason. Rates were also higher then…. so, it was just compounding the cost of ownership.
If you have the capital, and enjoy trading, then you should buy. It’s much cheaper.