Shoppers who’ve been contemplating a new-car purchase in the last few years are likely aware of the rising costs of new vehicles and wondering how to get the best value out of their next new-car purchase. The median new-car price among Cars.com dealers was approximately $42,500 in December — a 10% increase from December 2021 and 18% higher than December 2020. Inflation and the persistent inventory shortage have certainly contributed to the spike as manufacturer incentives have dwindled and new-vehicle markups become more common. While these conditions are largely outside of shoppers’ control, there’s another factor impacting average prices that is being driven by shoppers: a growing preference for larger, costlier vehicles.
Related: Best Value Car of 2022
The popularity of mid-size SUVs and pickup trucks is holding strong, and these vehicles typically carry heftier price tags. Among Toyota’s lineup, the RAV4 compact SUV had a median price of approximately $31,000 among Cars.com dealers in December, the median price for the mid-size Highlander was $42,000, and the Tundra pickup’s was $55,000. Even with its higher price tag, the redesigned Tundra saw sales jump 27% from 2021 to 2022, according to Automotive News. Ford’s lineup paints a similar picture: The F-Series pickup truck ($64,500 median price) is not only the bestselling Ford model, but also the bestselling vehicle overall in the U.S. Among Ford SUVs, sales for the mid-size Explorer ($50,500) were 1.5 times higher than for the more affordable compact Escape ($34,000).
These examples from Toyota and Ford illustrate that buying a smaller vehicle can make a new-car purchase significantly more affordable. However, it’s important to consider the car’s overall value, including its purchase price, available features and cost of ownership. For some shoppers, hearing “value car” brings to mind a subcompact sedan, but our analysis of the best value new cars for 2023 shows that budget-conscious shoppers don’t have to limit themselves to just one vehicle type.
We analyzed four vehicle categories (cars, small SUVs, small pickup trucks and electric vehicles) with a focus on affordability and value. To select the best value finalists in each category, we used a methodology that accounts for pricing and available features. Unsurprisingly, cars offer the most affordable overall median price among Cars.com dealers; however, the small SUV category features the most models. The electric vehicle category, meanwhile, has a notably higher median price than the rest, but our plug-in hybrid and all-electric finalists make the case that it’s possible to go electric without going broke.
The best value cars, small SUVs, small pickups and EVs below are ranked in order of the median price for the trim that includes all must-have features (Apple CarPlay and Android Auto, a blind spot monitor, forward collision warning with automatic emergency braking and pedestrian detection, and lane departure warning) standard or available. If a package or option is required to get the required features, it’s noted as an add-on and factored into the vehicle’s starting price. Variables that impact cost of ownership (a vehicle’s EPA-rated fuel economy, annual fuel costs if available, and manufacturer warranty coverage) are outlined for each vehicle but do not determine ranking. All median and starting prices, EPA ratings and fuel-cost estimates are from December 2022; starting prices include destination fees. For further details, see the methodology following the lists.
Cars | Small SUVs | Small Pickup Trucks | Electric Vehicles
It’s hard to beat a small sedan or hatchback when it comes to affordability and value. While a small car may not be practical for all shoppers, it carries a significantly lower median price among Cars.com dealers compared to the other three categories: The segment median for cars ($25,745) is $8,450 less than small SUVs, $17,325 less than small pickups and $33,925 less than EVs. Median prices for the best value finalists below are even more economical, ranging from $20,240 to $21,545. Although they may lack the flexible cargo space of SUVs or the utility of pickup trucks, the following cars meet all the technology and safety criteria while offering the highest average fuel-economy ratings of all the vehicle categories.
For many automakers, small SUVs have replaced sedans as the most affordable vehicles in the lineup, so it’s no surprise this category includes the longest list of finalists. The median price for non-luxury small SUVs among Cars.com dealers is $34,195; 15 SUVs meet all the criteria, with median prices between $23,000 and $30,000. The top models Cars.com’s recent Affordable Small SUV Challenge — the Kia Seltos, Subaru Crosstrek, Mazda CX-30 and Chevrolet Trailblazer — are also best value finalists.
All qualifying SUVs must offer standard or available all-wheel drive, and vehicles like the Hyundai Venue and Nissan Kicks that only offer front-wheel drive were classified as cars. For any SUVs below that don’t offer AWD standard, adding it increases the starting price by $1,500-$2,500, depending on the model.
For years, shoppers looking for a small pickup truck were limited to mid-size rigs like the Chevrolet Colorado, Nissan Frontier or Toyota Tacoma, but the arrival of the Ford Maverick and Hyundai Santa Cruz for 2022 expanded both the availability and affordability of small pickups. Cars.com’s Best of the Year 2022 winner, the Maverick also claimed the top spot among cheapest pickup trucks, followed by the Santa Cruz. This pair heads the group below of best value small pickups, too, offering our must-have features at median prices that fall well below the class median ($43,070). Additionally, the Maverick defies the gas-guzzling truck stereotype thanks to an EPA-rated 37 mpg combined with its standard hybrid powertrain.
Joining the compact pickups is another recent addition to the small pickup market: the mid-size Ford Ranger. The Ranger took second place in the latest Cars.com mid-size pickup truck challenge upon its reintroduction to the U.S. for the 2019 model year.
As interest in EVs grows and more models are introduced each year, cost remains a significant hurdle to purchasing an EV. According to consulting firm Deloitte’s 2023 Global Automotive Consumer Study, 52% of Americans cited affordability as the top concern for EV adoption, and nearly 70% considering an EV purchase expect to pay less than $50,000. The median price among Cars.com dealers for EVs and PHEVs (excluding luxury brands) was $59,670; fortunately, the best value EV and PHEV finalists are significantly cheaper, with median prices ranging from roughly $28,000 to $42,000.
The second biggest concern noted in the study is range anxiety. To provide the most practical options for shoppers, we added a minimum EPA-rated range of 246 miles as a qualifying feature for all-electric cars, which is the average range across all non-luxury EVs. Choosing a PHEV that offers a gas backup when electric range runs out can also be a good compromise for shoppers hindered by range anxiety.
Many automakers offer free charging or home-charging installation with the purchase of an EV. Among the featured vehicles below, Chevy offers complimentary Level 2 home-charging outlet installation or a $500 credit for EVgo public charging with the purchase of a 2023 Bolt EV or Bolt EUV. For the Hyundai Kona EV, shoppers can get 1,000 miles of free charging at Electrify America fast-charging stations.
Additionally, the new EV tax credit guidelines lift the automaker sales cap for eligibility, which means GM, Tesla and Toyota vehicles once again qualify. Shoppers can search for all vehicles eligible for the EV tax credit on the IRS website.
To identify the new vehicles that offer the best value for the money, we considered all models that fall under their respective segments’ median price among Cars.com dealers; luxury brands were excluded from the data in the interest of affordability. In order to be a finalist, a vehicle must offer an automatic transmission and gas-powered models must take regular fuel. All-electric vehicles had an additional requirement of a minimum range.
All finalists must also offer the following set of features as standard or available: Android Auto and Apple CarPlay, blind spot monitoring, forward collision warning with automatic emergency braking and pedestrian detection and lane departure warning. Among qualifying vehicles that met the initial pricing and features criteria, the final list was narrowed down to those with the most affordable median prices.
Finally, while some 2022 models were included if the 2023 model year wasn’t yet available, all vehicles that are discontinued after 2022 were excluded from consideration.
In addition to each finalist having a median price below that of its respective segment among Cars.com dealers, the trim level that encompasses all the must-have features must also meet this pricing criteria. All median segment prices below were recorded as of December 2022:
While the checklist for a vehicle’s “must-have” features can vary widely from one shopper to the next, we identified the following connectivity, safety and driver-assist features as the most beneficial for the majority of consumers. Among the must-have items below, a Cars.com survey showed that blind spot monitoring was the most important one for 56% of shoppers, followed by forward collision warning with automatic emergency braking at 49%, Apple CarPlay and Android Auto at 38%, and lane departure warning at 35%.
It should be noted that there’s more to a new car’s value than its upfront costs — total cost of ownership, including fuel efficiency, maintenance costs and warranty coverage, should be accounted for. All-electric vehicles and PHEVs offer the benefits of lower annual operating costs and potential tax credits. Additionally, the EV tax credit overhaul that went into effect Jan. 1 aims to make affordable EVs more accessible to budget-conscious shoppers; the complete guidelines for vehicle eligibility based on battery and materials sourcing are expected to be announced in March.
Financing costs should also be a consideration for affordability. As new-car loan amounts increase, interest rates and monthly payments are rising, according to J.D. Power. The firm estimates the average new-car interest rate was 6.4% for December, 2.47 percentage points higher than the same time a year previously. The average monthly payment for December was $718, up 7% from December 2021. Choosing an affordable option like one of the finalists in this report can mean getting a better loan rate along with a lower monthly payment.
To keep up with rising vehicle prices, shoppers have taken on more auto debt. According to Experian, there was a significant increase in average loan amounts in 2022 compared to 2021. The average new-car loan was $41,665 for the third quarter of 2022 — a 10% jump from $37,753 in the third quarter of 2021.
While taking on more debt to finance a new car is the solution for some shoppers, others are putting off large purchases or planning to buy more affordable vehicles amid rising inflation, interest rates and recession concerns. According to a recent Cars.com survey, 67% of shoppers in the market for a new or used vehicle plan to spend less than $40,000 on the purchase as 65% worry about an impending recession and 64% are concerned with rising interest rates.
Shoppers that have a vehicle to trade in should factor its value into the affordability equation. Putting the used car’s trade-in amount toward a new car reduces the purchase’s net price and the total amount borrowed when taking out a loan; this can equate to a lower interest rate and monthly payment.
As used-car prices spiked amid the inventory shortage, trade-in values increased in tandem: According to J.D. Power, the average trade-in value hit a record-high of $10,381 over the summer of 2022 — a staggering 49% year-over-year increase. More recently, though, used-car prices have started to drop along with average trade-in values.
According to Cars.com data, the average trade-in values for model-year 2013-18 vehicles dropped 21% from Jan. 1, 2022, to Jan. 1, 2023. For 2013 models, the average value was approximately $14,000 across all brands and $10,000 for mass-market models — down about 20% each. Meanwhile, the trade-in value of 2018 used cars was $29,500 for all brands and $20,500 for mass-market — down roughly 22%.
For shoppers looking to upgrade to the newest model year of their current car, examining average trade-in value compared to the new model’s price can be a helpful gauge. Among best value finalists for which Cars.com data are available, some carry a notably higher trade-in value as a percent of their median new price. We analyzed the trade-in values of 5-year-old (model-year 2018) vehicles and compared them with their median new-car price: The Fiat 500X, Nissan Versa and Ford Escape had the lowest trade-in values as a percent of their new-vehicle prices (34%, 36% and 41%, respectively). Meanwhile, the Chevrolet Bolt EV (62%), Honda HR-V (59%) and Toyota Prius Prime (57%) had the highest trade-in values compared to their new-car prices.
It’s important to note that a vehicle’s mileage and condition also heavily influence its trade-in value in addition to the make, model and model year.
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