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10 Best New Cars Under $20,000 for 2021

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We analyzed an array of sedans, SUVs and hatchbacks with low starting prices in order to come up with the best new cars under $20,000, as well as a few used vehicles. While these may be the cheapest cars to buy, they all have excellent expert and consumer reviews, high safety ratings and great gas mileage.

Best new cars under $20,000
Price Model Score Best …
$16,190 Honda Fit 4.6 Overall car under $20,000
$19,650 Hyundai Elantra 4.36 Sedan under $20,000
$13,400 Chevrolet Spark 4.27 Budget subcompact
$18,750 Hyundai Venue 4.23 Crossover with the longest warranty
$17,890 Kia Forte 4.21 Sedan with the longest warranty
$17,590 Kia Soul 4.15 Spunky style under $20,000
$20,025 Toyota Corolla 4.13 Included driver assistance technology
$18,995 Volkswagen Jetta 3.93 European styling under $20,000
$14,980 Nissan Versa 3.92 Budget sedan
$18,795 Subaru Impreza 3.88 Sports car under $20,000


How we chose the best new cars under $20,000

We examined new cars with a manufacturer’s suggested retail price (MSRP) under $20,000 and ranked them according to how well they performed in expert and consumer reviews from Kelly Blue Book (KBB) and Edmunds. They are listed from highest to lowest composite score. We also included ratings from the National Highway Traffic Safety Administration (NHTSA) when available and Insurance Institute for Highway Safety (IIHS) when IIHS named a car a Top Safety Pick. NHTSA gives cars star ratings — we included each vehicle’s overall star rating (1 to 5 stars).

2020 Honda Fit

  • $16,190 starting MSRP
  • 31/29/36 MPG combined/city/highway
  • 5 stars NHTSA

There’s much to like about this subcompact hatchback: It’s easy to park and maneuver. Plus, its Magic Seats™ fold to maximize interior space, and its low price may find space in most budgets. And while an automatic transmission will cost buyers about $800 more — manual transmission is standard — the starting price is still kept well below the $20,000 threshold. Upgrading to the EX trim gives you Honda Sensing, Honda’s suite of driver-assistance technology, though even that keeps you under $20,000. The highest trim, the EX-L, adds a power moonroof, smartphone integration and fog lights, but bumps the starting price to just over $20,000.

2021 Hyundai Elantra

  • $19,650 starting MSRP
  • 28/25/34 MPG combined/city/highway

This fully-redesigned sedan was named the 2021 North American Car of the Year. The changes include a wider and longer body, offering more headroom and legroom. Exterior style updates give it a leaner look with arrow-like contours along the sides. And, at a starting MSRP of $19,650, even the lowest trim provides automatic transmission, plus a comfortable ride, technology like smartphone integration and driver assistance features including emergency braking, lane keep assist and blind spot alert.

2021 Chevrolet Spark

  • $13,400 starting MSRP
  • 33/29/38 MPG combined/city/highway

Kelley Blue Book calls the Spark the least expensive new vehicle, ever. Unsurprisingly for its price, this hatchback is a subcompact with a small engine (only 98 horsepower) and standard manual transmission, but there are plenty of high-tech options and the choice of an automatic transmission at every trim level. Smartphone integration, a 7-inch touchscreen and a Wi-Fi hotspot are standard, but power windows and power door locks are not. Unfortunately, driver-assistance features are an option only on the highest trim, at an MSRP of $18,100.

2021 Hyundai Venue

  • $18,750 starting MSRP
  • 31/30/33 MPG combined/city/highway
  • 4 stars NHTSA; IIHS Top Safety Pick

A best SUV under $20,000, the Venue offers a lot of features and a long powertrain warranty (10 years, 100,000 miles) for a low price. It’s likely best for city drivers, as it’s even smaller than Hyundai’s subcompact Kona and doesn’t offer all-wheel drive. It comes standard with an automatic transmission, automatic emergency braking, 8-inch touchscreen, smartphone integration, automatic headlights and lane-keep assist. For $1,050 more, the middle trim adds blind spot collision warning and automatic climate control, while still keeping the MSRP just below $20,000.

2021 Kia Forte

  • $17,890 starting MSRP
  • 31/27/37 MPG combined/city/highway
  • 4 stars NHTSA; IIHS Top Safety Pick

A previous best new car under $20,000 winner, this sedan has a substantial powertrain warranty (10 years, 100,000 miles) and lots of standard features, including smartphone integration, an 8-inch touchscreen and active driver assistance technology. Edmunds rates it higher than the Toyota Corolla (more about that in a minute) on comfort, despite limited backseat room. The biggest con is that a manual transmission is standard; an automatic transmission necessitates going up one trim for a $19,390 starting MSRP.

2021 Kia Soul

  • $17,590 starting MSRP
  • 27/25/31 MPG combined/city/highway
  • 4 stars NHTSA; IIHS Top Safety Pick

A sensible car with a spunky attitude, critics say the Kia Soul feels roomier than its subcompact class would lead you to expect — it is one of Edmunds’ highest-ranked small SUVs. Standard features include a 7-inch touchscreen, rear occupant warning and smartphone integration with Android Auto and Apple CarPlay, together with a 10-year, 100,000-mile powertrain warranty. Manual transmission is standard — an automatic transmission costs $1,500 more.

2021 Toyota Corolla sedan

  • $20,025 starting MSRP
  • 32/29/36 MPG combined/city/highway
  • 5 stars NHTSA; IIHS Top Safety Pick

Available as a sedan or hatchback, this compact car comes standard with active safety features that are still optional on many luxury vehicles. For about $20,000 you get adaptive cruise control, emergency braking and lane departure warning. A standard 4-cylinder engine and automatic transmission produce up to 139 horsepower. Toyota did raise the sedan’s starting price mid-year to be $25 over the $20,000 limit, but it’s such a small amount that we decided to still include the vehicle in this list (the hatchback is a hair more with a starting MSRP of $20,715).

2021 Volkswagen Jetta

  • $18,995 starting MSRP
  • 34/30/41 MPG combined/city/highway
  • 5 stars NHTSA

The least expensive of all VW’s models, the Jetta comes with a turbocharged, 147-horsepower engine that gets 41 mpg on the highway and provides quick acceleration. An automatic transmission costs $800 over the base price, though it still keeps the MSRP under $20,000. Standard features include LED lights, 16-inch alloy wheels and smartphone connectivity. It has a 4-year, 50,000 mile warranty — less than some competitors, but still more than the industry norm of 3 years, 36,000 miles.

2021 Nissan Versa

  • $14,980 starting MSRP
  • 30/27/35 MPG combined/city/highway
  • 5 stars NHTSA

One of the most affordable new vehicles on the market, this small sedan is well-thought-out, with priority going to the cargo trunk and the driver and front passenger seats. But the 122-horsepower engine is modest — critics say it has underwhelming acceleration, especially with multiple passengers. Even so, the Versa is able to gallop at 80 mph on the highway while running at a cool 2,000 rpm. And since its 2020 redesign, automatic emergency braking and a 7-inch display are standard in addition to a manual transmission. Its main draw is that it’s able to achieve high scores from both customers and experts, even with a price starting under $15,000.

2021 Subaru Impreza sedan

  • $18,795 starting MSRP
  • 26/23/31 MPG combined/city/highway
  • 5 stars NHTSA; IIHS Top Safety Pick

The Subaru Impreza comes as a sedan or hatchback and is the only car on this list with standard all-wheel drive (AWD), making it a sporty choice for an economical price. The Impreza sedan can be a great daily driver with good handling. A $1,300 price increase ($20,095 MSRP) not only gets you an automatic transmission, but also Subaru’s EyeSight Driver Assist Technology, which includes emergency braking, adaptive cruise control and lane keep assist. If you’re after serious sportiness, however, the Impreza only provides 152 horsepower with 145 pound-feet of torque; buyers who want more get up and go should instead look at the best sports cars for the money.

Honorable mention: 2021 Chevrolet Trailblazer

  • $19,000 starting MSRP
  • 29/28/31 MPG combined/city/highway
  • 5 stars NHTSA

Brought out of retirement after its 2009 sunset, the new Trailblazer doesn’t have enough KBB or Edmunds reviews to make our regular list, but it’s a strong, new contender for the sub-$20,000 market. That said, some of the most intriguing aspects of this subcompact crossover are an off-road trim (starting MSRP $25,500) and AWD available on the LS trim and up (starting MSRP $23,600). Standard features on the base L trim include an automatic transmission, automatic emergency braking, forward collision alert, lane keep assist, an in-vehicle Wi-Fi hotspot, 16-inch wheels, smartphone integration and a 7-inch touchscreen.

Best used cars under $20,000

Here are several vehicles that made our list in 2019 but didn’t make the 2021 cut due to price increases or discontinuation. We used Kelley Blue Book’s Fair Purchase Price to give you an idea what one of these used cars might cost, though prices vary by date, location, mileage and condition.

2019 Honda Civic sedan

  • $19,039 KBB Fair Purchase Price*

Winner of Kelley Blue Book’s Best Buy award for the 2019 compact car category, the Honda Civic has long been a popular buy, due to its reliability and high resale value. It’s available as a coupe, sedan and hatchback, and comes standard with automatic climate control, Bluetooth and the Honda Sensing active safety suite.

2019 Mazda Mazda3 sedan

  • $18,321 KBB Fair Purchase Price

With a powerful engine and a standard automatic transmission, the Mazda3 is famous for being a fun drive. It has an AWD option too, which is rare in the smaller category of vehicles. Further standard features include keyless entry, push-button start, an 8.8-inch touchscreen, an HD radio and Bluetooth.

2018 Ford Focus

  • $11,611 KBB Fair Purchase Price

Affordable, responsive and a top-seller in its class, the Ford Focus comes standard with MyKey, a feature that allows owners to limit speed, sound system volume and more for younger drivers. In its bid to focus on trucks and SUVs, Ford did discontinue the model as a part of corporate restructuring, making the 2018 Focus the last of a good line.

Ways to finance the best new cars under $20,000

Potential lenders include credit unions, banks or online lenders. 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 even 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, based on your creditworthiness.

*Based on ZIP code 28205


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