Two notable things have happened in the car industry recently. The first is that the average car price in America rose above $40,000, driven by low supply and high demand. The other is that the average number of years a car is on the road is over 12 years. The fact that people drive cars longer should put downward pressure on prices. It hasn’t. Hundreds of thousands of Americans want new cars and want them now. But, a few new cars remain cheap–well under $20,000. (These are the cheapest cars to insure in America.)
The cheapest new car in America is the Nissan Versa. Its base price is $15,580, 40% of the national new car price average.
The Versa has all the features of a very inexpensive car. It is tiny, with only 15 cubic feet of trunk space. It has an unusually small engine–1.6 liters and four cylinders. It puts out only 122 horsepower. The car weighs 2,600 pounds, which means two strong men could tip in onto its side.
The Versa sits at one of the two ends of the car spectrum in the U.S. At one end are SUVs, pickups and crossovers, which became the preferred mode of larger vehicle transportation. The other end is anchored by light, high mileage, relatively inexpensive models. The center of the car market is gone. It used to be occupied by sedans and to a lesser extent muscle cars. Sedans became so unattractive to buyers that recently Ford killed almost all its models in that segment.
The Versa is also the anti-Tesla. Teslas are still expensive, with an average price north of $50,000. The Tesla advantage is high mileage. The Versa’s may not be as good, but with gas prices low, it is a realistic alternative.
It may take several years for the eclectic car to dominate and potentially render cars like the Versa obsolete, especially when their prices significantly decline. However, during this transitional period, the eclectic car holds its own place. (These 15 cars hold their value the longest.)
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