The 2025 Versa, with no bells or whistles, came with an MSRP of $17,390. Nissan's announcement that it's ending production means the last $20k new car in America will soon be driven off the forecourt. And the average price of a new vehicle teased $50k for the first time in December, reports Gizmodo's Bruce Gil, though it fell back to $49k in January.
There are plenty of reasons prices have climbed this decade, like pandemic supply-chain disruptions, rising material and labor costs, and tariffs. But the bigger reality is that automakers are prioritizing more profitable models that people who can actually afford to buy new cars—and that's not a budget compact car.
With the Yaris and Smart ForTwo fading memories to American drivers, the Versa was also the last subcompact car on offer. Modern "city cars" such as the Mini Cooper and Fiat 500e surely have enough to satisfy anyone who needs a small vehicle, but you won't get either new for $20k. And the Fiat's range is only 141 miles.
Budget drivers have choices: the Hyundai Venue, Chevrolet Trax and Kia Soul all come in around $21k, at least on paper, and all are well-reviewed. With the reliability of used cars no longer the risk it once was, though, new cars are becoming a luxury item.
Based on Cox Automotive data reported by The New York Times and others in early 2026, households earning $150,000 or more now account for 43% of new-car purchases, up from roughly 30-33% in 2019. This shift highlights a "K-shaped" auto market where high-income consumers drive sales, while buyers with incomes under $75,000 have dropped to only 25-26% of the market.
We have a RAV4. It's 10 years old and just had its first big maintenance outlay: a new cat. 90k miles and hardly a dollar spent on it but for a new battery, wipers and oil. Why would a practical-minded person buy a new car when Auto Trader has fifty Toyotas like it in every zip code in America for less than $20k?
The Era of the $20,000 New Car Is Over [Gizmodo]
