A decade ago, if you wanted to spend less than $20,000 for a new car, you had to settle for lackluster performance, a cramped passenger cabin and a stripped-down interior. The automotive industry quietly referred to these entry-level cars as “penalty boxes.” But many of today’s cars costing less than $20,000 offer more attractive features than much pricier cars were able to provide in the past—although you won’t find any full-size sedans or big SUVs in this price range.
Among the best cars under $20,000*…
Most fun to drive. The Ford Focus handles like a much more expensive performance-oriented vehicle. Even the base 2.0-liter, four-cylinder engine delivers a peppy 160 horsepower (hp). In my opinion, it’s the best-driving car in the sub-$20,000 category, a hair ahead of the also-fun-to-drive Mazda3. (The Focus ST, which has a turbocharged 252-hp engine, is especially fun to drive but starts at $24,495 and comes only with a manual transmission.)
The Focus also is a great-looking car as either a sedan or a hatchback, with a well-made and well-equipped interior. Ford’s Sync infotainment system is a lot of fun, too…once you figure it out. It can be frustrating at first.
Price: Starts at $17,590 for the sedan or $21,090 for the hatchback…miles per gallon (mpg): 26 city/36 highway.
The best use of space. The only thing cheap about the Kia Soul is its sticker price. Kia now makes cars that are just as good as those sold by Toyota and Honda—only with lower prices and longer warranties.
The Soul’s distinctive boxy styling has a purpose. It allows the small, fuel-efficient Soul to provide a surprising amount of interior space—126 cubic feet. In comparison, the not-at-all-boxy Volkswagen Beetle, which is a half-foot longer, provides 100.5 cubic feet of interior space. The base model Soul isn’t totally stripped down, and the 1.6-liter, four-cylinder engine delivers an acceptable, if unexciting, 138 hp.
Helpful: Tell the salesperson that you know that the Soul is being redesigned for 2014—it might help you negotiate a better deal on a 2013. The improvements for 2014 are minor, so you won’t be missing much.
Price: Starts at $16,975…mpg: 25 city/30 highway.
Most reliable. There’s a reason that the Honda Civic is among the best-selling cars in America year in and year out—it’s extremely well-made. The Civic annually finishes near the top of the small sedan/coupe pack when it comes to problem-free driving. It also posts some of the best safety scores in the class.
Honda redesigned the Civic for 2012, but the result felt cheap and underequipped—the 2012 Civic base model didn’t even come with air-conditioning standard. So Honda revised the Civic again for 2013, and this time Honda got it right—though the base 1.8-liter, four-cylinder engine delivers just 140 hp. It comes with a respectable list of standard features including Bluetooth connectivity to link to audio devices wirelessly, a rearview camera and that A/C that was missing last year.
Price: $19,755…mpg: 28 city/39 highway.
Most luxurious interior. The Volkswagen Golf is an economy-priced hatchback with an interior that conveys a sense of refinement and quality that you might expect from a car costing twice as much. It feels much roomier on the inside than you would expect from a hatchback, too.
The Golf’s quiet, composed ride is in keeping with its luxury feel, and its 2.5-liter engine provides a strong 170 hp. The Golf isn’t as nimble or fuel-efficient as some of its competitors, however, or as inexpensive.
Price: Starts at $19,990…mpg: 23 city/33 highway.
Best long-term value. The Honda Fit costs around $1,000 more than the Kia Soul, but better fuel economy and Honda’s high resale values might just make it the better long-term value. The Fit isn’t as much fun to drive as the Ford Focus—the Fit’s base 1.5-liter, four-cylinder engine delivers just 117 hp—but like the Focus, it handles very well. And while the Fit is a very small hatchback—less than 13.5 feet in length—its fold-flat rear seats provide a lot of functional cargo room.
Price: Starts at $17,015…mpg: 27 city/33 highway.
Softest ride. The Toyota Corolla is a small sedan that offers the soft, quiet, comfortable ride of a much larger, more expensive car. It’s very reliable, too—truly a car that’s relaxing both to drive and to own. Just don’t expect the venerable Corolla to deliver much driving excitement. Its 1.8-liter, four-cylinder, 132-hp engine feels sluggish…the steering doesn’t have any “feel”…and the interior and styling are unspectacular. But if “cush” is what you want for less than $20,000, this is it.
Price: Starts at $17,855…mpg: 27 city/34 highway.
Best hybrid. The Toyota Prius c is easily the best hybrid available for less than $20,000—its competitors in this price range are the Honda Insight and CR-Z, both of which fall well short of the Prius c’s fuel efficiency. The Insight also comes up short in performance, while the CR-Z, a two-seater, is less practical. While many hybrids fail to deliver the kind of stellar fuel economy that their buyers expect, the Prius c’s mileage is excellent. It is well-made and reliable, too, and surprisingly fun to drive for a vehicle that is somewhat underpowered (the 1.5-liter, four-cylinder engine delivers just 99 hp) and engineered primarily to minimize gas bills. The Prius c doesn’t provide much cargo room, but it does feel surprisingly roomy inside for such a small car.
Price: Starts at $19,875…mpg: 53 city/46 highway.
Best city car. The Scion iQ is very affordable and fuel-efficient. Its tiny size makes it easier to find parking spots in crowded cities. And unlike its city car rival, the Smart Fortwo, the iQ isn’t horrible to drive—it’s underpowered like the Fortwo but agile, and it doesn’t have the Fortwo’s annoying jerky transmission. It has a backseat, albeit a cramped one. However, the iQ is not a wise choice if you do a lot of highway driving. It’s easily buffeted by crosswinds and has a 1.3-liter, four-cylinder engine that produces just 94 hp.
Price: Starts at $16,020…mpg: 36 city/37 highway.
Best pickup truck. The Toyota Tacoma has a reputation for reliability and a high resale value, plus a fairly refined interior by mid-sized pickup standards. The base model’s 2.7-liter, four-cylinder engine produces 159 hp, which is sufficient unless you need to tow something heavy.
Price: Starts at $19,370…mpg: 21 city/25 highway.
*Prices are manufacturer’s suggested retail price (MSRP) for the base model with automatic transmission and include destination and delivery charges. All fuel-economy figures are EPA estimates.
EXTRA: Looking for the best used cars under $6,000?
