The $25,000 Car is Going Extinct

Affordable new cars under $25,000 are becoming increasingly rare. Automakers are prioritizing higher-profit, more expensive vehicles because many fixed costs (engineering, design, marketing, emissions standards) are similar across the entire model range. While budget-friendly models like the Ford Maverick initially saw huge popularity, their low profit margins led to price hikes and ultimately, the phasing out of many similar models. The remaining affordable options have seen significant price increases due to low supply. Consumer demand for higher trim levels and features also contributes to this trend. Though recent economic uncertainty shifted some consumer preference back to more affordable models, the era of the bargain car is largely over, with almost every new car now considered a luxury purchase.