The days of the sub-$20,000 car are gone, but automakers are finally making moves to bring more affordable vehicles back to the market. At the National Automobile Dealers Association Show in New Orleans, major brands—including Ford, Mini, Mitsubishi, and Ram—shared their plans to introduce lower-end trims, special value editions, and even revive past nameplates to counter soaring car prices, Automotive News reported.
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Why automakers are shifting to budget-friendly cars
Car prices have been on the climb over recent years as rising interest rates and inflated model sizes ballooned the average price of a new car to a staggering $49,740, according to data from Cox Automotive. As prices soared, so did loan expenses, with monthly payments averaging around $756. Suffice it to say that affordability is a growing concern for buyers—one that automakers are finally responding to with more cost-conscious options.
Ford
Ford, for instance, plans to reintroduce a base version of the Bronco for 2025, increase production of lower-end F-150 STX trims, and expand budget-friendly trims for the Escape and Explorer. Mini will soon offer lower price points on some models, while Mitsubishi is looking to cut the price of its Outlander Sport and add a cheaper trim. Ram, on the other hand, is preparing to roll out more affordable Ram 1500 variants. Volkswagen has already launched a value-oriented Wolfsburg Edition of its Tiguan, which has quickly gained traction.
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A half-step in the right direction
These moves don’t signal a return to true economy cars, but they do indicate a shift toward making vehicles more attainable. Instead of entirely new budget models, automakers are introducing slightly de-contented versions of existing models to maintain profitability while offering lower entry prices.
The shift is also fueled by changing consumer demand. While high-end trims and luxury features dominated sales in recent years, buyers are now prioritizing affordability as interest rates and loan terms become more daunting. Some automakers are even considering bringing back smaller sedans and hatchbacks, once thought to be dying segments, as a way to meet this demand. However, regulatory challenges and safety standards make it difficult for ultra-cheap models to return to the scale seen in previous decades.
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Could Honda’s sub-$30,000 EV shake things up?
While most brands are focusing on gas-powered affordability, Honda is looking to tackle the EV market with a budget-friendly model. According to a report from Nikkei, Honda is considering a sub-$30,000 electric vehicle for the U.S. as part of its new 0 Series lineup.
Honda
Unlike the automaker’s current EV offerings, this lower-cost model would be built in North America, possibly at Honda’s Ohio EV manufacturing hub. This move would help the company sidestep impending tariffs on Mexican and Canadian imports and potentially qualify the vehicle for the $7,500 federal EV tax credit. However, with political uncertainty around the future of EV incentives, the final price tag remains unclear.
Honda hasn’t confirmed specific details about the model, but given market trends, a compact crossover is a likely candidate. The 0 Series, previewed at CES with the Saloon and SUV concepts, could fill a major gap in the U.S. market, where truly affordable electric options remain scarce.
Honda
A key question is whether a sub-$30K price tag is truly achievable for an EV. Battery costs remain a major hurdle, and most affordable EVs today, such as the Chevy Bolt EUV and Nissan Leaf, are still priced above that mark before incentives. Honda’s ability to deliver a competitively priced electric model will depend on battery advancements, supply chain efficiencies, and potential government incentives.
The end of the sub-$20K car?
Of course, cheaper trim options are still a far cry from true, sub-$20,000 budget-friendly cars. Such models are unlikely to return as automakers favor bigger vehicles with better profit margins. Chevy, for example, has seen success with the redesigned Trax, which was benched in 2022 before returning as a top-selling model in 2024.
The Trax, along with the Trailblazer and Equinox, all start below $30,000, making them some of the more affordable options in the crossover segment. Meanwhile, Buick’s Envista has become GM’s top gasoline-powered conquest vehicle, attracting younger buyers who might have otherwise considered used cars.
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A rising tide lifts all prices
Even though automakers are expanding their budget-friendly lineups, the reality is that affordability remains relative. Cars that were once considered entry-level, such as the Toyota Corolla and Honda Civic, have moved upmarket, leaving buyers with fewer true economy options.
Honda
Some industry experts argue that the best hope for affordability lies in the used car market, where depreciation and off-lease vehicles create opportunities for budget-conscious consumers. However, even used car prices have remained elevated due to supply shortages and demand fluctuations.
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Final thoughts
While automakers’ renewed focus on affordability is a positive development, it’s clear that “cheap” is a relative term. The industry’s definition of affordability now hovers around $30,000, far above the sub-$20K price points many buyers still hope for.
Chevrolet
That said, the return of lower-end trims and budget-focused special editions should help alleviate some financial strain for consumers. And if Honda follows through with its sub-$30K EV, it could be a game-changer for buyers looking for an electric alternative without breaking the bank. Until then, budget-conscious shoppers will need to navigate an ever-changing landscape of pricing, incentives, and availability to find the best deals.
Looking ahead, automakers will need to balance profitability with consumer demand for cheaper models. Whether this means more stripped-down versions of existing cars, a resurgence of compact sedans, or increased competition from new players remains to be seen. But for now, the push toward affordability, however incremental, suggests that the industry is starting to take consumer concerns seriously.
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