The $20K starter car is disappearing

SALT LAKE CITY — This story began as a personal observation. My kids are reaching the age when I am starting to pay attention to what it might cost to get them starter cars. What I found is that it costs a whole lot more than it did just a few years ago, and the culprit is a lot more than inflation.

For years, $20,000 meant a starter car. It was not fancy or flashy, but it was new.

Now, that kind of car is almost extinct.

According to Edmunds, just 0.2% of new vehicles sold in 2025 cost $20,000 or less. Fewer than 5% sold for less than $25,000.

"They are indeed unaffordable for the vast majority of the American buying public," said Ray Shefska, who has spent nearly 50 years in the car business and is the co-founder of CarEdge.

Shefska said inflation is not the only reason new cars have become so expensive.

"It's much more profitable for the automobile manufacturers to build high-profit-margin, high-priced vehicles than it is to build low-profit-margin, low-priced vehicles," he said.

In other words, automakers are not simply charging more for cheap cars. They are building fewer cheap cars.

It is a trend some in the automotive industry call "trimflation."

Asked to explain the term, Shefska said, "Well, what happened was that many of the automakers just stopped building the base model vehicles with very few, frills in it."

When the cheaper version disappears, the next trim level becomes the new base model — and the buyer pays more.

So, what is the solution?

"I think ultimately, perhaps, maybe cheap Chinese vehicles," Shefska said. "I almost see us becoming a nation that looks a lot like Thailand, where there's a lot of motorcycles and motor scooters and electric bikes, but not a lot of cars because people can't afford cars."

That may be a practical solution for some people, but not for everyone.

For buyers who need a trunk, or even a passenger seat, the best advice may be to separate their wants from their needs.

There are still a handful of new cars priced around $20,000: Nissan has the Versa; Kia has the K4; and Hyundai has the Venue.

Buyers can also look to the used-car market, where there are more choices at lower prices.

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