Why Cheap Cars Are Disappearing

There are about 40 different car brands in the United States, but one kind of car that appears to be disappearing is the cheap car. Historically, about 20 percent of vehicle sales would have transacted below $20,000; however, they have completely dried up in the last few years. New cars are becoming more expensive, and it is unlikely those cheap cars will ever be back.

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Why Cheap Cars Are Disappearing

[Mrkevi]

They still make cheap cars, except you overpay for them.

[kevinxu]

Let me save you 11 minutes of your life, short answer: Automakers make less money on cheaper cars.

[techguy]

I think what this meant to say was, “consumers feel comfortable spending more on SUVs because the government and banking industry is flooding the sector with low interest loans.” When the auto bubble bursts and consumers have to pay cash again, they’ll be demanding cheap cars again.

[numtot]

“Automakers have to pay workers and executives”
What I think you meant was, automakers have to pay executives first, then workers get what’s leftover.

[ClarkS]

Yes. The expectation is to have that technology. That tech honestly isn't that expensive to make any more. Let's stop pretending like putting in a USB port is SO fancy now. It's basic.

[oldbuddyben]

I started selling cars in 2002 and remember people balking at the mere thought of a 60 month loan term... here I am 18 years later and have people asking if we have any options longer than 84. I see people every day buying vehicles that suit their needs 5% of the time. For example, someone looking for a full sized 4wd SUV that doesn't have but 3 people in their household and doesn't need bad weather/off road capability. When I ask them why they're wanting a large, 4x4 SUV.. "well, we take my mother in law on vacation with us once a year and need the extra space." So for the majority of their driving time they are paying for WAY more vehicle than they truly need. More power to them, it's their money, not mine.

[EliteRowmaster]

Presentation fell apart 30 seconds in when they didn’t adjust the sale of cars under $20, 000 for inflation

[chiefdan]

Young people should always buy used cars and learn to maintain them without the anxiety of the car’s value plummeting after you drive it off a dealership!

[actionhero]

The gap between a Kia and a BMW has shrunk. That is, BMWs are starting to look cheap, and Kias are starting to look expensive.

[Dee--Jay]

How is everything getting more expensive but the wages are still the same? I dont like that!

[greenleafyman]

It was really about overengineering. Cars that was cheaply made could become expensive when added with so much complicated electronics. I really like the idea of Citroen 2CV, soft suspension, spacious, reasonable weight, very fuel efficient and most of all, no unneccessary electronics on it which make it cheaper, just a car you need to travel. Sadly, looks and convenience are always the king in the eyes of majority consumers.

[Larry]

The thing is... Why buy a cheap new car, when you can buy a really nice/expensive car, USED for less?

[woodstocknun]

why buy a cheap new car, when you can buy a depreciated 6 year old car that has everything you need for half the price...

[fromhigherground]

This title is misleading, it should be “Why Affordable Cars are Disappearing”.

[rscott]

I remember back in 70's & 80's there were a lot of Honda Civics, Toyota Tercels, VW Rabbits, Mazda 323's on the roads and were great, small econo boxes !

[katerinagiron]

I love my 2013 Hyundai Sonata Hybrid car. $14, 000 with 66, 000 miles was really good to me. It's been nice to fill up the tank 2 times a month vs when my bf and I had a 1999 Ford expedition. With the 1999 Ford expedition we would spend $70 to fill up the tank and only last 4-5 day. We don't miss that at all!

[lucabasile]

I don't think that cheap cars sales have fallen. Instead, cheap cars have become more expensive. I bought my Ford Fiesta in 2012 for 11k and now the new Fiesta 2020 has a starting price of 23k. There you go.

[thelead]

Cheap cars are in abundance, they’re known as Used.

[lillywitmer]

What I miss the most is common affordable 2 doors. Fun for a low price, it’s so sad. Props to the BRZ and 86 though

[axelvetter]

It wasn't mentioned that higher emission and safety standards also mean higher costs. Therefore here in Europe car manufacturers phase out many engine options and sometimes the whole car. One prominent example was the new Suzuki Jimny. Everyone wanted one but sales stopped after just one year as upgrading the engine would have been too expensive for such an affordable vehicle.