2016 looks like it'll be a good year for new car buyers on a tight budget. Car dealerships are flush with options that come in well under the $20,000 price point, offering plenty of choices regardless of a buyer's preferences. Though the cheapest new cars tend to be compacts or subcompacts, shoppers can choose among domestic or import manufacturers. Coupes, sedans, hatchbacks, and even a wagon can be found among 2016's best inexpensive offerings. We'll be honest, many of the affordable new cars on this list embrace the minimalist approach, holding a firm line on fancy design elements or expensive features to achieve the desired price point. However, shoppers with some flexibility can still drive away with a nicely-equipped sporty compact car to ring in the new year.
2016's Best New Cars Under $20k
10) 2016 Toyota Prius c
The 2016 Toyota Prius c, a subcompact hatchback, is one of the most affordable hybrid cars on the market. Coming in with an MSRP that just makes our cutoff point ($19,560, to be exact) the Prius c helps make Toyota’s hybrid technology accessible to a new audience, coming in about five grand less than the flagship Prius model. The Prius c is powered by an electric motor paired to a 1.5-liter gas engine and makes 99 horsepower. This combination is good for EPA estimates of 53 mpg city and 46 mpg highway. There are drawbacks, of course; the Prius c could use a bit more refinement in terms of interior materials and driving comfort. But for shoppers who want an affordable hybrid that’s perfect for city driving, the 2016 Toyota Prius c is probably the one.
9) 2016 FIAT 500L
True, the regular FIAT 500 hatchback comes in at a few grand less than its wagon counterpart and might be a better overall deal. But the perky-looking 2016 FIAT 500L still represents a bargain at an entry price of $19,495, which not many other compact wagons can challenge. Don’t expect the FIAT 500L to provide a thrilling experience; the base model’s turbocharged 1.4-liter four-cylinder engine provides 160 horsepower and 184 lb-ft of torque, which is adequate, but combined with the 500L’s moderate handling abilities, just feels like it’s getting the job done. Fuel economy checks in at a modest 25 mpg city, 33 mpg highway. Most important, though, the 2016 FIAT 500L comfortably seats five passengers, with plenty of headroom, and offers a ton of cargo space for a subcompact car.
Photo Credit: Honda
8) 2016 Honda Civic
The Honda Civic has long been a standout in the competitive compact car category, and the redesigned 2016 model is just as good as ever. The 2016 Honda Civic starts at $18,640, which is a bargain considering that this five-passenger sedan is good at everything it does. The base model Civic produces 158 horsepower and 138 kb-ft of torque from its 2.0-liter four-cylinder engine. That's not stellar, but it's good enough, and the Civic's power delivery is smooth with good throttle response. Even better, this powertrain gets great fuel economy of up to 31 mpg city, 41 mpg highway when ordered with the optional continuously variable transmission (which pushes the MSRP very close to, but not above, our $20,000 benchmark). The 2016 Honda Civic also delivers comfortable and generous seating, good standard features, and good safety ratings.
Photo Credit: Scion
7) 2016 Scion iM
The 2016 Scion iM is an all-new hatchback that seats five, offered at a starting price of $18,460. Frankly, performance isn't the iM's strong point. A 1.8-liter four-cylinder engine produces 137 horsepower and 126 lb-ft of torque, and comes with a six-speed manual or continuously variable transmission. The iM has EPA ratings of up to 28 mpg city, 37 mpg highway, which is average for the class. The interior is quiet and comfortable, although a bit cramped in back, which is typical. However, the 2016 Scion iM earns its spot on this list thanks to its generous menu of standard features. A 7-inch touch screen infotainment system, a rearview camera, app connectivity, and a six-speaker Pioneer stereo system are among the equipment included with the Scion iM's sub-$20,000 price.
6) 2016 Scion iA
The 2016 Scion iA is a totally new model for this year and is also the first sedan to join the brand's lineup. Despite making its debut alongside the aforementioned Scion iM, it's quite a different car, with good reason. The $15,700 Scion iA is actually a thinly-disguised Mazda Mazda2, which was sold in the United States as a hatchback until last year. This origin story helps account for the Scion iA's more athletic handling and overall driving dynamics. Its 1.5-liter four-cylinder engine provides just 106 horsepower and 103 lb-ft of torque, but comes with a great tradeoff: fuel economy ratings of up to 33 mpg city and 42 mpg highway, which is among the best in its class. Transmission choices are a six-speed manual and a six-speed automatic. The 2016 Scion iA’s five-passenger cabin features plenty of standard equipment for a car at its price point.
Photo Credit: Toyota
5) 2016 Toyota Yaris
The 2016 Toyota Yaris is a subcompact hatchback with accommodations for five, starting at $14,895. The Yaris is available in two-door and four-door body styles. Both come with a 1.5-liter four-cylinder engine that makes 106 horsepower and 103 lb-ft of torque. The difference in fuel economy between the five-speed manual and four-speed automatic transmissions are negligible, topping out at 30 mpg city and 37 mpg highway. These fuel ratings are average for the class, but most competitors have more modern transmissions, which would improve efficiency. The Yaris' interior earns praise, since it is finished in higher-quality materials than many competitors and offers a more intuitive layout. The seats are comfortable and provide plenty of space, even in the back, which is a sticking point with many subcompacts.
4) 2016 Chevrolet Sonic
The 2016 Chevrolet Sonic is heavily praised, considering its modest starting price of just $14,835. Buyers get a subcompact sedan with seating for five; the hatchback version costs several hundred more. 138 horsepower and 125 kb-ft of torque come from a 1.8-liter four-cylinder engine, paired to a five-speed manual or six-speed automatic transmission. Response and acceleration are good, although fuel economy is slightly below average. In theory, the turbo version of the 2016 Chevy Sonic is also available just a few bucks below our $20,000 threshold, but actually finding one at that price might be unlikely. The upgraded Sonic makes the same horsepower from a turbocharged 1.4-liter four-cylinder, but torque is boosted to 148 lb-ft and the manual transmission gains a gear.
Photo Credit: Ford
3) 2016 Ford Fiesta
The 2016 Ford Fiesta is another subcompact offering that's available as both a sedan and a hatchback, offering seating for five at a starting price of $14,580. Budget buyers are limited to the base engine, a 1.6-liter four-cylinder, but that's fine. The Fiesta moves easily with its 120 horsepower and 112 lb-ft of torque, aided by either a five-speed manual or a six-speed dual-clutch automatic transmission. Fuel economy ratings for the base Fiesta top out at 27 mpg city and 37 mpg highway, which is about in line with the competition. The Fiesta is fun to drive and has good handling, and the interior quality is impressive thanks to its thoughtful design and high quality materials. Overall, the 2016 Ford Fiesta is praised for being one of the most stylish options in the class.
Photo Credit: Kia
2) 2016 Kia Rio
The 2016 Kia Rio is a subcompact car that also offers the choice of a trunk or a hatch, but once that choice is made, the Rio is a fairly straightforward prospect. For a starting price of $14,165, the Rio provides a drivetrain comprised of a 1.6-liter four-cylinder engine, paired to a six-speed automatic transmission. The Rio makes 138 horsepower and and 123 lb-ft of torque, which is more than most competition and results in good acceleration. It's little lower than average on fuel economy, though, with EPA estimates of 27 mpg city, 37 mpg highway. In terms of space, the 2016 Kia Rio provides both a roomier cabin in both models, and a bigger cargo area in the hatchback model, than most competitors in the class.
1) 2016 Nissan Versa
The 2016 Nissan Versa is proudly the least expensive new car available in the United States. The sedan has an opening bid of $11,990; the hatchback's starting price is quite a bit more, although still well within our parameters. The Versa is sparsely equipped, lacking even power windows and power locks, but it's still a new car for 12 grand. Higher trim levels offer better accommodations, but the price quickly approaches the competition. All Versas are powered by the same 1.6-liter four-cylinder engine, making 109 horsepower and 107 lb-ft of torque. The optional continuously variable transmission is a splurge, but boosts fuel economy to a competitive 31 mpg city, 40 mpg highway. In other words, the 2016 Nissan Versa serves best as very basic transportation for buyers who really need a new car at, or close to, its entry level MSRP.