10 Best New Cars Under $20,000
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New car prices are rising faster than wages. But that doesn’t mean you have to pick the priciest model on the lot. Whether you need all-wheel drive or a hatchback, there’s a quality, budget-conscious option out there. In fact, with so many options, it can be hard to sort through them.
Here are the best new cars under $20,000 and you may be able to get even better prices as dealers make room for 2019 models. All of these 2018 vehicles are rated highly by industry experts and obtained a five-star safety rating by the National Highway Traffic Safety Association.
Best new cars under $20,000
- Chevrolet Sonic
- Honda Fit
- Kia Soul
- Kia Forte
- Chevrolet Cruze
- Ford Focus
- Subaru Impreza
- Volkswagen Jetta
- Honda Civic
Cute and tiny, the base model of this car comes with windows you have to roll down by hand. For the more tech-dependent, you can upgrade it with higher trims and high tech options, including a turbocharged engine, wifi hotspot and Apple CarPlay. Offered as a sedan and a hatchback, the hatchback is about $2,000 more — though it still comes under the $20,000 mark. KBB rates it 4.3 out of five; it’s been rated it 5.0 out of five on Edmunds’ consumer reviews, though the pool of reviewers was limited at time of writing.
Honda calls the back seat in the Fit “the Magic Seat.” The seat back folds down completely flat so the car can transport long objects; the seat bottom flips up so the car can carry tall objects; and, of course, it functions as a seat with enough room for three adults. Because you can flip up one back seat for cargo, leaving the other for passengers, you don’t have to choose between ferrying your spouse, child or that large object you just bought. You could still have backseat passengers while transporting something large. For a compact car, this is pretty nifty. KBB rates it 4.6 out of five and consumer reviews on Edmunds rate it 4.3 out of five.
For the young and young-at-heart, the Kia Soul’s boxy silhouette stands out as something different. A subcompact hatchback/SUV crossover, the Soul offers plenty of headroom for passengers, making it feel roomier than it looks. KBB rates it 4.3 out of five and consumers rate it 4.8 out of five on Edmunds. Like others on this list, keep in mind that the base price for the Kia Soul’s lowest trim level is for manual transmission — automatic transmission is more.
With a substantial warranty, lots of standard features and a low price, the Kia Forte is a comfortable and practical sedan with some of the highest safety ratings in the industry. The advanced airbag system has dual front, front-seat-mounted side and full-length side curtain airbags. Sensors can detect the severity of an impact and the presence of a front passenger to control airbag inflation. KBB rates it 4.2 out of five and Edmunds consumers rate it 4.3 out of five.
The Cruze is available as a sedan and as a hatchback, though the hatchback option pushes the price over $20,000 before rebates. Both come across as more of a cruiser than an economy car, as the Cruze has the ride quality of a larger car. However, you can only buy extra tech and safety packages when you also buy the highest trim level of the car. The diesel option also sets the Cruze apart from rivals, but would bump it over our $20,000 price point. KBB rates it 4.3 out of five and consumers on Edmunds rate it 4.3 out of five. Notably, it was widely reported in November 2018 that General Motors Co. will cease production of the Cruze in 2019.
With high-tech options and great fuel economy, the Ford Focus sedan offers a sporty feel with quick steering. It has a small, quiet interior and an optional infotainment system with fast response times. It is also available as a hatchback, the MSRP for which is $20,500, though you may be able to find rebates in your area that bring it under $20,000. KBB experts rate it 4.1 out of five and consumers on Edmunds rate it 3.9 out of five.
According to KBB, the Mazda3 model line is the “all time champion” in this budget category. Edmunds says it’s the best car to drive in the compact sedan and hatchback class. The hatchback still falls under the $20,000 threshold, though it is more than the sedan. Both practical and sporty, the Mazda3 is a cool car. For cars this size, not only is the price reasonable, the total cost of ownership is low as the line has excellent gas mileage of 31 mpg overall. KBB rates it 4.4 out of five and consumers on Edmunds rate it 4.6 out of five.
The Subaru Impreza is the only compact car on this list with standard all-wheel drive (AWD), which not only makes it a safer ride on wet and snowy roads, but means it has superior handling on any road. The car is rated 4.3 out of 5 by KBB and 4.0 out of five by consumers on Edmunds. And like the Mazda3, the hatchback Impreza comes in at a slightly higher price than the sedan, but not by much. Like several others cars on this list, the base prices are for manual transmission — automatic is extra.
The least expensive of all VW’s models, the 2018 Jetta even comes with a longer warranty than its predecessors: a six-year, 72,000 mile limited warranty. The car features an especially large trunk among sedans its size, quick acceleration and a touch screen that’s standard across trims. KBB experts rate it 4.1 out of five and consumers on Edmunds rate it 4.1 out of five.
The Honda Civic sedan provides excellent gas mileage while still being able to deliver plenty of giddy-up acceleration — but that shouldn’t be too much of a surprise, since it comes from a company well-known for its engine quality. The Civic has room for several passengers, retains its value well and there’s a wealth of technology packages and trims you could add. It also comes as a coupe and hatchback, but both slightly exceed our $20,000 limit with a base MSRP of $20,245 and $21,045 respectively, although there may be rebates in your area that could knock the price down. KBB rates the sedan 4.7 out of 5 and consumer reviews on Edmunds rate it 4.6 out of five.
Ways to finance the best new cars under $20,000
Potential lenders include a credit union, bank or online lender. Apply to a few in order to compare offers and see which one is best for you before stepping foot onto the car lot. Dealers are often able to raise your APR and make a profit off your loan, not just your car. The best way to avoid this is to go with a preapproved auto loan in hand, so you know what APR you deserve and you can ask the dealer to beat that rate. On LendingTree, you could fill out an online form and receive up to five potential auto loan offers from lenders at once, instead of filling out five different lender applications.
In order to make our list, the lowest price on a vehicle’s MSRP range had to be less than $20,000 at the time of publication. The vehicle had to get five out of five stars in overall crash test safety ratings by the National Highway Traffic Safety Association and have a rating of 4 or greater out of 5 by KBB and consumers on Edmunds. Because 2019 crash safety tests have not been published, all vehicles are 2018 models.