(NEXSTAR) – New vehicle inflation may be falling in 2023, but if you’re in the market for a new car and want to spend less than $20,000, there’s only one option – and there could soon be none.
That car, according to a Kelley Blue Book (KBB) analysis, is the Mitsubishi Mirage.
The average sales price in July was $19,205, the report found, with similar compact offerings such as the Hyundai Venue, Kia Rio, Nissan Versa and Toyota Corolla all going for “well over $20,000.”
In 2021, the average transaction price for a new car, which had increased along a steady line since 2012, jumped sharply in 2021, peaking near $50,000.
The Mirage, with hatchback and sedan versions, costs less than half of what the average U.S. new vehicle does. That average is now just above $48,000 — 25% more than before the pandemic struck three years ago.
“I just won’t pay that kind of price,” said Karen Schaeppi of suburban Minneapolis, who bought a red Mirage sedan last month for around $19,000. Schaeppi, who is 78, said she could have afforded an average-priced new vehicle. But because she’s only 5 feet tall, she wanted a small car so she could see easily over the hood.
When she set out to replace her 2008 Ford Focus, Schaeppi was surprised to find no small cars available at the dealers she visited — at any price.
“There was nothing that existed,” she said. “Not even close.”
Despite the low price, U.S. sales of the Mirage have been sluggish. Mitsubishi sold only 5,316 in the first half of the year — 44% below the same period in 2022.
And it might not be available at all in a couple of years. The trade publication Automotive News reported last week that Mitsubishi will stop selling the Mirage by mid-decade. Mitsubishi, part of the Nissan-Renault alliance, declined to comment. But its website says production of the Mirage in Thailand, where it is built, is ending.
Once the Mirage disappears, Mitsubishi’s least expensive vehicle would be the Outlander Sport small SUV. It starts at around $24,600, which includes shipping.
The scarcity of small cars at dealerships helps explain why the average new vehicle costs so much: Detroit’s Big Three automakers — General Motors, Stellantis and Ford — began to jettison the compact and subcompact car business about five years ago. Low profit margins for small cars and consumers’ increasing shift to SUVs and trucks made the decision an easy one. Likewise, Toyota and Honda later halted U.S. sales of their subcompacts.
Then a pandemic-related computer-chip shortage slashed global auto production. Vehicles were suddenly in short supply at a time of high demand. Prices shot up.
In the past five years, the car market has seen significant changes on the lower and higher end of the price spectrum. In July 2018, there were 12 models selling for less than $20,000, according to KBB. There were also 12 cars going for more than $100,000 – not including exotic names such as Ferrari, Lamborghini, Rolls-Royce and other similar brands – a number that has since ballooned to 32 vehicles.
There is good news for car buyers, however, as the average sale price continues to fall from the record high in 2022.
“New-vehicle prices, primarily driven by cuts in luxury and electric vehicles, are decreasing as inventory is steadily improving. With higher inventories and higher incentives helping to keep downward pressure on prices, there certainly are good reasons for shoppers to be heading back into the market,” said Rebecca Rydzewski, research manager at Cox Automotive.
There’s especially good news for patient electric vehicle (EV) shoppers who have been saving and watching the market – EVs are down almost 18% from July of 2022 to this year, falling from $65,108 to $53,469.
The Associated Press contributed to this report.