The $25k car is going extinct?

The Extinction of Affordable Entry-Level Cars in the US

A primary theme in the discussion is the disappearance of affordable, new, entry-level cars in the US market, often referred to as "econoboxes" or "penalty boxes." Participants widely lament this trend, noting that even vehicles previously considered budget options have seen significant price increases.

"The Mirage is an absolute joy to own: its simple 3cyl engine gets 50mpg if I'm careful." - stn8188
"Chevrolet Trax can be found between $20-21k USD but... when I look at inventory, nothing within ~75 miles is under $25k." - neogodless
"Mazda 3 used to be a $20k car (and even less before that) but now starts just over $24k (sedan) / $25k (hatchback)." - neogodless
"The base Ford Maverick just edged over $25K for 2024. Now it's $26K." - kevin_thibedeau
"Now it's $26K. It's not a "real truck" but considerably larger than any econobox." - kevin_thibedeau
"I make pretty good tech money and I can’t imagine spending that much on a car. It would be cheaper to uber everywhere I went." - clickety_clack
"it’s funny to me that $25,000 is cited as an "affordable" price for a car, when that's almost double what I spent on the most expensive car I've ever owned (a Land Rover Discovery II, which was a lovely machine)." - marssaxman
"I've done the math a few times and it just makes no sense to own a car for me. Public transport is the fastest way to get to work, and for everything else I can uber every time PT isn't the best option and still come out cheaper than buying the most budget new car." - Gigachad
"I'm always a little surprised anyone buys American cars at all. For a while they used to make larger trucks than anyone else did but even that's not really the case anymore, it's all just overpriced garbage with a popular brand." - msgodel
"The Subaru Impreza starts just under $25k, and comes standard with their EyeSight system for adaptive cruise control, automatic braking, etc." - al_borland
"The closest thing to affordable and comfortable I could find this past year after maintenance costs pilling up on my ‘15 Ford Fiesta (that I got for a staggering $14k post college) was a Honda HRV Sport." - notesinthefield
"I was in the UK for the first time last month and was struck by how many hatchbacks and sedans they have that we don't in North America." - jccalhoun
"The dwindling of small hatchbacks in the US is so disappointing it’s difficult to put into words. They were the perfect little suburb grocery grabbers, and now you can’t buy them without overpaying for a used one." - cosmic_cheese
"In 2014 I got a very nice and very basic brand new sedan for about $14k. That's not so long ago, but the car market in the US seems to get worse every year. (cost, newer models are bloated and overly-expensive, etc.)" - everdrive
"The answer to your question is less and less every year with only sales tax exemption remaining as the greatest support provided. That support did total some US $231 billion over 14 years from 2009 through until 2023." - defrost (discussing Chinese EV subsidies and their impact on global pricing)
"I'm not talking about kei cars, either." - tanh (referencing the existence of affordable cars in Japan)
"The reason the US car industry does not want a $25k car is that the financing opportunities are crap for a car of this low cost." - aorloff

Manufacturer Profitability and Market Strategy

A central argument is that manufacturers prioritize higher-margin vehicles (SUVs, trucks, luxury cars) over low-margin, affordable cars, contributing to the latter's decline. This strategy is driven by the desire for greater profitability per unit, especially in an environment where consumers are increasingly willing to finance more expensive vehicles.

"Manufacturers make huge margins on expensive vehicles and very slim margins on cheap vehicles. The numbers differ, but I think even in the lead up to the 2008 crisis automakers had to sell 5-10 "econobox" cars to make the profit they made on one luxury car, SUV, or truck." - snovymgodym
"Automakers don't really want to make or sell them because the margins are so slim." - snovymgodym
"Instead Ford wants to sell a 80k SUPER F-250 BIG MANN TRUCK. All for what, you to drive 10 minutes to Walmart, buy groceries and drive back." - 999900000999
"Now it's $26K. It's not a "real truck" but considerably larger than any econobox." - kevin_thibedeau
"If you don't need one for work, then buy a Camry. They're really nice." - iancmceachern (suggesting that luxury vehicles or large trucks are often bought for status rather than necessity)
"Car companies, particularly the American and German brands, make the vast majority of their money from new car buyers and leasers, not the used car market. Over the past few decades, OEMs have focused almost exclusively on serving those customers, to the detriment of virtually everyone else." - AlotOfReading
"They're all fragile and fall out of warranty coverage easily." - timewizard (referring to complex modern car components and their impact on longevity and repair costs, implicitly tied to manufacturer strategies)
"It’s a tough market that OEMs don't want to be in, so they cede it almost entirely to foreign OEMs that haven't moved upmarket yet. Foreign OEMs are structurally incapable of selling cars at those prices (by design), so the bottom end of the market gets hollowed out to nothing but a few "loss leader" vehicles." - AlotOfReading
"Electric vehicles eliminated the need for manufacturers to sell (usually small and cheap) efficient ICE cars in the US. For years, CAFE regulations have meant that manufacturers must meet minimum fleet fuel economy averages or else pay fines. In order to sell more profitable but less fuel-efficient F-150s, Ford also needed to sell little Fiestas or Focuses. But now that Ford can sell Mustang Mach-Es and Chevy can sell Blazer EVs for 50 or 60 grand AND get credit for something like 100 MPG equivalent, there's no longer any incentive for them to spend huge sums developing cheap cars that will net tiny profits (if any)." - lastofthemojito

The Normalization of Debt and Consumer Behavior

The discussion highlights how the widespread acceptance and normalization of car debt, often through long loan terms and rolling over existing debt, fuels the market for more expensive vehicles. This phenomenon is linked to aggressive marketing, sales tactics, and a cultural acceptance of perpetual car payments.

"Normalization of debt. For many Americans, having a monthly car payment in perpetuity is considered acceptable. Car loans have their place and can be used responsibly, but due to marketing, sales tactics, and cultural sensibilities what often ends up happening is that people start from a monthly dollar amount and then work forwards to buy the most expensive vehicle they can, even if it means taking the loan term out to 72 or 84 months." - snovymgodym
"It's also very normal for people to never pay off their car, instead trading in the vehicle after 3-5 years and rolling equity in the loan over to their next car." - snovymgodym
"Obviously, this consumer habit is great for dealers, manufacturers, creditors and buyers of consumer debt, as well as the US Government and investors -- it's just not ideal for the consumers themselves if they're trying to preserve wealth and build savings." - snovymgodym
"the interest on those loans is maddening" - autobodie
"I think that really depends on what part of America. At least where I grew up around a bunch of middle class conservatives listening to eg Dave Ramsey (who has other problems IMO) most people think of you as reckless/irresponsible for doing that sort of thing." - msgodel
"I grew up around a bunch of middle class conservatives in the Southern USA and almost all of them were into debt on house, car, often even taking loans to pay for kids private school. And you'd never know until the family divorced and their lifestyle drastically decreases." - aprilthird2021
"Dave Ramsey has to be relatively new because debt was extremely extremely common among conservatives in the US (no idea about liberals didn't live among them)" - aprilthird2021
"So do the cost of cigarettes and alcohol. Things they burn a larger proportion of their money on than higher earners." - kevin_thibedeau
"My reptilian-brain logic prevents me from even considering getting a loan for a car. ... Getting a loan for a car is throwing more money away than buying a car in the first place." - BLKNSLVR
"The issue with America is the vast majority of truck buyers really can't afford an 80k truck. ... The only reason the typical person can buy an 80k truck is they can get a loan. Let's say their was a hypothetical car loan limit of 1/4th of your annual income. A lot of people would find out really fast they don't need a massive truck." - 999900000999
"Americans now owe $1.64 trillion in auto loans, and cars make up 9% of all consumer debt in the country. In fact we now owe more on cars than student loans. The average loan term is rising - almost 6 years now. 60-day delinquency on auto loans is at 6.6%, the highest ever recorded, and is as high as 9% in some states. So while car prices keep going up, people also keep going deeper into debt to buy one they can't afford." - paxys
"You can blame manufacturers or banks, but ultimately the problem is unchecked consumerism and treating cars as a status symbol, which is sadly pervasive in this country." - paxys
"Since my beloved Honda Fit got totaled. I bought it new in 09 and only had 80K miles on it. They don't sell new ones in North America any more. So I bought a Kia Rio. They don't make those any more." - jccalhoun
"From Australia's largest Toyota dealer I know that ~70% of new car sales are financed. A proportion of the rest would be funded by home equity but that is harder to measure. An interesting trend that I've heard from multiple dealership (friends and family) - the number of people being rejected for financing has dramatically increased in the past 12 months." - nikcub
"The Subaru Impreza starts just under $25k, and comes standard with their EyeSight system for adaptive cruise control, automatic braking, etc." - al_borland
"The closest thing to affordable and comfortable I could find this past year after maintenance costs pilling up on my ‘15 Ford Fiesta (that I got for a staggering $14k post college) was a Honda HRV Sport." - notesinthefield
"Why the personal insult? Mods is this ok per HN policy? I use and need it for work, yes big heavy things also need to be done in cities too. I noted this in my original comment. It's very tacky to personally insult a working person for the tools of their trade." - iancmceachern, in response to criticism of driving a large truck.
"It’s a tough market that OEMs don't want to be in, so they cede it almost entirely to foreign OEMs that haven't moved upmarket yet." - AlotOfReading

The Role of Tariffs and Trade Policy

Tariffs and import restrictions, particularly on vehicles manufactured outside the US, are seen as a factor that limits competition and artificially inflates prices for consumers. The desire for affordable Chinese EVs is expressed, with the current regulatory environment seen as a barrier.

"For types of cars/trucks which are generally unavailable on the American market, tariffs and import restrictions are keep rather modest." - bell-cot
"We don't want affordable Chinese EVs. That's the answer here. They can build cars better, cheaper, faster than we can." - 999900000999
"We do want affordable Chinese EVs, the same way we want Honda, Toyota, Nissan, Kia, Hyundai, Subaru (all among the best selling auto manufacturers in the USA every year). You can't buy them because the government and domestic car companies don't want you to." - paxys
"If that was true it wouldn't be illegal to sell them." - willcipriano (referring to the desire for Chinese EVs)
"I do want cheap Chinese EVs. I can't buy them because of government regulation." - vovavili
"I'd prefer to have cheap U.S. cars ... but I suspect we won't seem them until the threat of cheap Chinese cars becomes a reality." - JKCalhoun
"Are also much cheaper to produce than US manufactured vehicles." and "The reason for high truck prices is 25% tariff on imported trucks for the last 50 years ie lack of competition." - xbmcuser
"So much this. Similar "unbounded" pressure on student loans / tuition. It keeps going up because students are able to get loans. Comparing the average income around here to MSRP of vehicles I see around here and it's clear that a lot of people are driving around in something that approximates a second mortgage!" - baby_souffle
"But here's the kicker. While subvenstions seem to fail in most cases for regular people - like gvt giving people money to buy apartements equals to apartments being equally more expensive - it seems to work wonders for automotive thanks to Chinese. EU offers up to 10k EUR subvention for electric cars and with that in mind you can get something like BYD Dolphin for slighly less than 20k EUR. Which is mind blowing. The car is comparable to Volvo XC40." - zeroq
"Aka how to shoot yourself in the foot and hand over the market to Chinese manufacturer. In Europe, only Renault created a low cost brand (Dacia). Once chinese brands become commonplace everywhere, tradional carmakers will have a hard time taking back market share." - Glawen
"Sure the US might decide to block Chinese cars (apparently the EU isn't), but they can't force the rest of the world to buy $65,000 American built cars when the alternatives are less than 1/3rd of that price." - AJ007
"Imagine if we let in the Chinese EVs stacked with the tax credit, you could get a car for 5000$ or less." - 999900000999
"In 2021 my beloved Honda Fit got totaled...They don't sell new ones in North America any more. So I bought a Kia Rio. They don't make those any more." - jccalhoun

Changing Societal Norms and Car Culture

The discussion touches on cultural shifts and how cars are perceived and used in different regions and demographics. The increasing size and perceived "overkill" of certain vehicles, the reliance on cars in much of the US, and critiques of car-centric urban planning are all mentioned.

"Cars are a reflection of ones personality here in the Midwest. Some grow out of it or never subscribe to the mentality. It's certainly cheaper to bicycle, weather and health permitting. Though car driving and ownership are a big cultural phenomenon, especially among men 18-50." - paulryanrogers
"Cars are a necessity in pretty much most of the country. Even in areas with good public transit, people who are most likely to go into debt to buy a car are also more likely to live further away from public transit and commute for work. Outside of New York, I can’t think of another city where living without a car is really an option." - darth_avocado
"Public transportation is seen as only a thing for children and the poor, at least in too many of my circles. Politicians and the public don't seem willing to invest to overcome the chicken and egg problem." - paulryanrogers
"The best car is the one you don't own. No payments, insurance, parking tickets. Unfortunately most American cities are centered around driving. So much money , and space wasted on these multi ton metal boxes. In many places most(much) of the city is literally just parking spaces." - 999900000999
"The article compares 2025 prices to 2019 prices. We've had high inflation building upon high inflation for the past several years, so I'm not shocked that prices are higher. We might as well ask where the $1 menu went at fast food restaurants. Yesterday's prices are long gone." - jimmar
"You can hear street racing noises from a highway three miles away! I used to think it was just a few blocks away because I could hear it but I looked at a map. A few people install aftermarket exhausts/noise makers critics call "fart cans." After a recent police crackdown the amount of racing noise at night decreased greatly." - supertrope
"The article compares 2025 prices to 2019 prices. We've had high inflation building upon high inflation for the past several years, so I'm not shocked that prices are higher. We might as well ask where the $1 menu went at fast food restaurants. Yesterday's prices are long gone." - jimmar
"People like cars that can go 80-90 mph for hundreds and hundreds of miles while carrying 4 people. With crash protection. Add electrics with thousand lbs of batteries, and you've got today's 4000-6000 lb SUVs, all costing an arm and a leg." - blendo
"You can see more tweets like this about the car industry by following these people: [links]" - darth_avocado (implicitly referring to discussions about car culture)
"The fact that a certain percentage of the population buys trucks and SUVs and uses them basically as passenger cars. That the entire American market has skewed towards larger vehicles. Even small businesses are buying trucks now." - darth_avocado
"Maybe it's the exception that proves the rule?" - usefulcat (in response to a user noting their F-250 has low mileage)
"But then you've also got the outer suburbs which is a hellscape similar to the US. It's also not that expensive to rent inner city or buy an apartment. The outer suburbs mostly exist because people have a mentality of invest in land at any cost, even if it means living in a wasteland and commuting 3 hours a day." - Gigachad (discussing city planning and suburban sprawl in Australia)
"I can hear street racing noises from a highway three miles away!" - supertrope
"And you are absolutely wrong on the repair of BMWs and especially Audis. Just look at used cars of those brands from a few years ago. You are right on maintenance, but I'm talking about repairs. Things breaking and needing replacement or repair." - iancmceachern
"The issue with America is the vast majority of truck buyers really can't afford an 80k truck." - 999900000999
"I would say that's not what matters in this discussion (comparing trucks vs cars)." - iancmceachern
"Let’s say their was a hypothetical car loan limit of 1/4th of your annual income. A lot of people would find out really fast they don’t need a massive truck." - 999900000999
"Also, not a gigantic truck, and no infotainment (or even powered windows!) It'd be a manual transmission if it wasn't an EV." - blacksmith_tb (describing a potential affordable truck)
"The closest thing to affordable and comfortable I could find this past year after maintenance costs pilling up on my ‘15 Ford Fiesta (that I got for a staggering $14k post college) was a Honda HRV Sport." - notesinthefield
"Cars now have 6 to 8 airbags, backup cameras, more high strength steel, automatic breaking systems etc etc. I love the safety that those all bring, but it's not free." - briandw
"I've seen the offroad performance videos, the cybertruck isn't anything to write home about wrt to either ground clearance or scrabble factor (broken road hill climbing, etc). Other cheaper vehicles perform as well or better." - defrost
"Why the personal insult? Mods is this ok per HN policy? I use and need it for work, yes big heavy things also need to be done in cities too. I noted this in my original comment. It's very tacky to personally insult a working person for the tools of their trade." - iancmceachern
"The average truck buyer is only making 82k or so." - 999900000999
"Most trucks are bought by fleets, by small businesses, etc. They're the standard white fleet specs, not the high end trucks. They're bought by farmers, ranchers and drywallers. Most." - iancmceachern
"The problem is unchecked consumerism and treating cars as a status symbol, which is sadly pervasive in this country." - paxys
"As if the car was ever only a utilitarian commodity at any point in its history. The car has always been a status symbol." - philistine
"It's not just car loans, our entire economy works because of debt, and has for at least the last 20 years. The idea that nearly every one benefits financially from this behavior and yet we see this behavior at scale solely and coincidentally because of a sudden mass moral failing is a bit hard to believe." - crystal_revenge
"For people who do a lot of driving, having a nice car really benefits their quality of life. No one wants to spend hours every day in a miserable little penalty box." - nradov
"The cars people today call a "little penalty box" are easily equivalent or better to many of the luxury cars of the 1990s. Bluetooth, AC, ABS, backup camera. There's almost nothing that isn't required / standard. Plus they tend to be the efficient 35+ mpg cars." - neogodless
"But, the car has always been a status symbol." - philistine
"I find a certain liberation in not caring too much about risks of car park dents and "curb rash" and other surface-only non-mechanical auto-maladies." - BLKNSLVR
"The price of cars went double. Literally double. Same car, like Fiat Panda, with the same engine and configuration, that ten years was worth one potato is now worth exactly two potato." - zeroq
"I can't see how non-"enthusiasts" can justify spending so much money on their vehicle. there are houses in my suburb with 3-4 of these expensive, new model cars out front." - denkmoon
"Cars are the worst spending many, perhaps most people make. It's remarkable in Australia how many people are borrowing and paying much more for them as well." - sien
"One downside in the US of driving a small car now is considerably more lethal in a crash with larger vehicles. I drive a Mazda 3 and sometimes it feels like a bicycle compared to some of the enormous SUV and overdone trucks." - elcritch
"The sweet spot has always been a 1 year old used car with low miles. There’s lots of those for less than or about $25k. Honda, Toyota, and Mazda have models in those ranges that will easily last a decade." - chasd00
"You also don’t have to worry about someone snatching items out of the bed. The biggest downsides are (1) I’m reluctant to put anything gross back there (vs throwing a trash bag in the bed like I used to with my truck), and (2) people see a van, assume you’ll drive obnoxiously slowly, and preemptively cut you off in traffic lest they get stuck behind you." - ARandomerDude (discussing the pros and cons of panel vans)
"In 2014 I got a very nice and very basic brand new sedan for about $14k. That's not so long ago, but the car market in the US seems to get worse every year. (cost, newer models are bloated and overly-expensive, etc.)" - everdrive
"Cars now have 6 to 8 airbags, backup cameras, more high strength steel, automatic breaking systems etc etc. I love the safety that those all bring, but it's not free." - briandw

The Viability and Fate of the Used Car Market

The conversation also touches on the used car market, with varying opinions on its value and accessibility. Some suggest it's the only viable option for affordable transportation, while others note that even used car prices have increased significantly, and that purchasing a used vehicle can come with its own set of risks (e.g., former rental cars, out-of-warranty issues).

"Instead Ford wants to sell a 80k SUPER F-250 BIG MANN TRUCK. All for what, you to drive 10 minutes to Walmart, buy groceries and drive back." - 999900000999
"My reptilian-brain logic prevents me from even considering getting a loan for a car. ... Getting a loan for a car is throwing more money away than buying a car in the first place." - BLKNSLVR
"The best car is the one you don't own. No payments, insurance, parking tickets. Unfortunately most American cities are centered around driving. So much money , and space wasted on these multi ton metal boxes. In many places most(much) of the city is literally just parking spaces." - 999900000999
"I've done the math a few times and it just makes no sense to own a car for me. Public transport is the fastest way to get to work, and for everything else I can uber every time PT isn't the best option and still come out cheaper than buying the most budget new car." - Gigachad
"The sweet spot has always been a 1 year old used car with low miles. There’s lots of those for less than or about $25k. Honda, Toyota, and Mazda have models in those ranges that will easily last a decade." - chasd00
"1 year old used cars are inevitably going to get more expensive as new cars get more expensive (or cheaper new cars cease being made)" - resoluteteeth
"I've bought a couple of those and never again. They're usually former rental cars and people best the shit out of them. I've had so many stupid things break" - freedomben
"Maybe worth getting a mechanic to look before buying" - aprilthird2021 (advice for buying used cars)
"It might be a German car thing, as the value drops precipitously once it's close to out of warranty. There were barely any savings on cars that were within a year old, whereas I was able to get something for half sticker that was nearly the same vehicle." - brandall10
"Used car prices went through the roof in 2020-2022 for pandemic-related reasons, so trying to take any lesson from that era is unhelpful." - jerlam
"It can also depend on the popularity of a given car in a particular area. In 2012 we wanted to buy a lightly used Honda Fit, which were quite popular in our city. But, possibly because of that popularity, the prices of used Fits weren't that much less than a new one, so we ended up getting a new one instead." - usefulcat
"While not being a petrol head I was still living in a lala land where you could buy a brand new car for 10k EUR. Nothing fancy, just "a car"." - zeroq
"Dealing with dealers who wouldn't budge even a few hundred off the inflated listing prices, the interest rates on financing and then the insane insurance costs was not pleasant. I have an old Subaru beater that I was also thinking about upgrading but after this whole fiasco I decided to spend some money to fix body and small mechanical issues myself and drive this thing another 10 years hopefully. It's just not worth it." - sakopov
"I find a certain liberation in not caring too much about risks of car park dents and "curb rash" and other surface-only non-mechanical auto-maladies." - BLKNSLVR
"Free yourself from the worry of shopping cart dings today! My solution was buying a hail damage car." - financypants
"I was in the market looking for a used SUV for my wife to haul around our kids last year." - sakopov
"Subaru's have an increasingly good reputation for long-term reliability. Stick with and love the beater." - BLKNSLVR
"I looked into that when I was buying a car in 2020 and I found the price discount wasnt nearly as big as I thought it was going to be plus the car was out of warranty plus all the parts now had 10k miles of wear on them." - lispisok