• Apr 16, 2011
As you've likely noticed, new cars aren't getting cheaper. Pack enough options onto a new C-segment hatchback or sedan, and it's not difficult to elevate the MSRP to $25,000 or more. At the same time, there are still plenty of B-segment and C-segment vehicles that can be had for $16,000 or less, and the base Nissan Versa can still be snagged for $9,990; albeit with zero options and no radio. The same goes for the cheapest Hyundai Accent, which starts at $9,985.

How much longer can Nissan continue to offer a new car for under $10,000? USA Today thinks those days are about over, as the 2012 Versa is set to bow at next week's New York Auto Show. The new Versa appears to be better looking and more refined than the model it replaces, making a $10,000 price tag unlikely. The new Accent is another probable candidate to drop its $10K model. It's also expected to make an appearance in New York, and should be markedly improved over the current car in all respects.

So, does the arrival of the next-generation Nissan Versa and Hyundai Accent mean the end of the $10,000 vehicle? Does it even matter? While the ultra-cheap stripper models are handy marketing tools for their manufacturers, a shopper with $10,000 to spend can get a lot of car for that money on the used market. With a radio and A/C to boot.

[Source: USA Today]


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  • 47 Comments
      • 3 Years Ago
      Inflation: it happens (and it's actually a good thing).

      I've also read that McD's and other fast-food chains are teetering on the ragged edge of profitability with their .99 menus. The $1.09 menu doesn't have the same ring, but it's inevitable.
        • 3 Years Ago
        Moderate inflation is truly a good thing. Inflation values up people working for their money (as wages tend to go up with inflation) and money in investments that actually do things (like investing in companies that tend to generate profits faster than inflation). It devalues people sitting on their money. Most economists shoot for core inflation (not commodities like oil) at 2% for the best economic growth rate. Core inflation is currently less tha 1%- a slightly higher inflation rate would actually help us. From a budget perspective, we didn't significantly pay down the debt after WWII, we just reduced its value through inflation.

        And devaluing the currency versus other currencies can be good for the economy, in moderation. It values up people making things over people consuming things in a country. Remember Japan asked the IMF to DEVALUE the yen, not increase it. In the US, we tend to consume more than we produce and our country tends to oursource jobs to other countries, both largely the result of strong-dollar policies, amplified by countries buying US currency to help their exports. Devaluing the US dollars makes our exports more competitive and their imports more expensive. This leads to more jobs, with the majority of jobs being created in manufacturing since the dollar dropped vs. the Yen and Euro- reversing a long trend. Devaluing the US dollar versus other currencies makes US investment more likely. Devaluing the US dollar will lead export-based economies to buy more treasuries to try to maintain their exports to US consumers- so we are not in a position where we need to worry about raising interest rates.

        Overall, we need balance in economic policy. The US has been following a strong-dollar policy, concentrated on people consuming more cheap imports than we produce exports. It leads to increased foriegn investment, which makes the investment class richer, but doesn't help people who work for a living. That isn't sustainable. We need to have balance in the economy between production and consumption. Some shifts need to be made. You may not be able to buy imports as cheaply, but you are more likely to have a job.
        • 3 Years Ago
        You're talking about deflation. Truly stupid indeed.
        • 3 Years Ago
        Again, Inflation is when the purchasing power of a currency is lowered, causing prices to rise.

        When prices fall thats deflation, Would you like to dig yourself deeper in that hole?
        • 3 Years Ago
        This could very well be one of the dumbest things I've ever heard.

        How is the fact that our money is losing value a good thing? How is making everything cost more a good thing? What bizarro-world are you living in?
        • 3 Years Ago
        What a truly stupid statement, When is devaluing the money a good thing, when is it a good thing to make all of the things we need more expensive? Fun fact the US dollar has lost 98% of its value sense 1913 (the year the federal reserve was created.)

        wow I just cant get over your statement
      • 3 Years Ago
      Inflation is the key aspect of rising prices. Economics doesn't work in a vacuum. Automotive technology can only go so far in offsetting a loss in purchasing power with cost-saving technology.

      Look at the price of oil, education, healthcare, food, etc. - it's all going through the roof.

      By the way, this isn't intended to be political - it's just a fact that there's no free lunch - if you spend beyond your means, you're destined to live below your means. We're entering that phase as we continue to buy back trillions in our own treasuries - which in effect is the same as printing money. Couple that with suppressed interest rates, and prices will continue to climb.

      It's very, very unfortunate but until we start being honest with ourselves we'll continue to see stories like this...
        • 3 Years Ago
        @ Kelv00n. I can agree with you generally but blaming health costs on health executives is not the source of the problem. If company x had over-compensated executives, company y would undercut them and they would be forced to cut their compensation to stay competitive. If that is not naturally occurring, then you know there's something intervening with the market to artificially prop things up. What is intervening? Mandates, oligopoly-enhancing laws that make barriers to entry nearly impossible within the industry, and much more. Same as the banks - it's becoming more and more apparent that winners and losers are not being chosen by the market. That's a scary thing.

        Also, education cost inflation isn't about dried up dollars, it's the fact that students get free money from the government with no restrictions to artificially bid up the prices of college tuition. What is the result? Students think they win, but the universities are the real beneficiaries. If students are forced to pay you with full non-bankrupt-able recourse and there's no real credit worthiness at stake, prices will continue to rise until students find alternative ways to spend their money actually learning something and not getting a degree as a symbolic measure to say "yes, I went to school for 4 years. I can now work at Best Buy."

        Back to cars - I'd be willing to be there's a market for cheaper, less safe cars with no frills in this economy. However, there's an artificial barrier with current regulations. Do I know for a fact? Of course not. I think if we see prices rise continually, people will subvert current regs by just buying older cars. I love cars, but they're just a terrible way to spend your money when the price of complimentary goods and essentials continue to increase.
        • 3 Years Ago
        "Inflation is the key aspect of rising prices...."

        It has to do mainly with the ever dwindling/erosion of the purchasing power of the..US$. It (fiat money) is becoming to be virtually "worthless"...(backed by thin air if you ask me).

        In the greater scheme of things, the US$ will eventually cease as the reserve currency of the World.
        • 3 Years Ago
        While I agree with everything you said, I think we can't fully account for the disappearance of the sub-10k car based on inflation alone. The other, equally if not more, important factors in the U.S. are safety standards and preferences. Safety standards are a no-brainer, as I think everyone here on AB knows (and constantly b*tch about). What I mean by "preferences" is that the U.S. market has moved up to the point where very few people want a stripper car nowadays. I could be wrong, but I tend to think this is a marketing issue: as car manufacturers realized that U.S. buyers could be fooled into buying fluffed up trucks (SUV's) for crazy amounts of money, they have moved their marketing and inventories to reflect that. Now, even with the death of old-school SUV's, the trend has remained. Add that to what Ant14 said about used cars, and new sub-10k cars are hard to rationalize economically.

        A quick note: same with education and health care. It's not primarily due to inflation. Both costs have risen at a much higher rate than inflation for the past 20+ years. For education, it's got a lot to do with the fact that State and Federal money that used to support higher ed. has dried up. For health care, it's the cost of the health care bureaucracy (in great part due to the compensations of top execs in the health care industry) and inflated pharmaceuticals (we pay more than the rest of the world in health care based on GDP, and yet we receive less of it).
      • 3 Years Ago
      Well, they can 'offer' a car for $9.990, but you won't be leaving the car lot without paying over 12K trying to make it drivable. Simply because it's just a marketing scheme to get people into the dealership to sell them the $14K version that actually has profit for the dealership and commissions for the salesperson, or to sell cars in their used car lot.

      But today it's just too expensive to manufacture and distribute a non-selling vehicle, when they will have so many used cars due to such a high lease rate, to lure the low ball customer into the dealership.

      • 3 Years Ago
      A couple of things. First, eventually China will start selling cars in the U.S., and you can bet they'll market themselves on price first. If Hyundai, Nissan and everyone else abandons the sub-$10,000 market, then whatever Chinese manufacturer debuts here first will surely occupy that space...the marketing advantage is just too good.

      The second is the advent of good used car warranties. You can go into a dealership, pick out a used small car with a pretty decent factory warranty, and have most of the assurance of a new car for less money, but without sacrificing features. I've done this twice, and it has worked out beautifully.
      • 3 Years Ago
      They say you can get a cheap car for $10k new, but really with options you can live with it would be $16k. No reason to buy a new car these days, buy a year old car and you will go up a couple model levels anyways.
      Jeeper43
      • 3 Years Ago
      I would much rather get a used car for under 10 than any new car that costs 10. I grabbed a 2003 grand am GT fully loaded about 2 years ago for 4 grand
      • 3 Years Ago
      Tata Nano anyone? It will still get you under the radar with the makings of the little kids red and yellow car.
      • 3 Years Ago
      Its called inflation, and regulations, both are caused by our government (inflation is more the Feds fault but the government allows it to happen)

      Look at the price of food, gass, gold, silver (commodities) its not just cars, thank you national debt and the federal reserve
      • 3 Years Ago
      I say keep the strippers coming. I find it much more enjoyable to drive a light, noisy, raucous car with no radio and a/c than a plush loaded-up car with all the toys.
      Luxury cars remind me of silk-lined caskets.
        • 3 Years Ago
        I agree with both of you: what's the point in all this power and performance if you can't use it?

        I thought about 335s, 350Zs and a few other cool power/performance cars before I settled on an MX5. I can wring that car out every time I drive it. The rest? I pay for the privilege of performance I can't use.

        I still think a basic BMW 328i with nothing more than a sport package is a fun car though. It asks that you give it some stick more often, and the luxury fripperies are gone. But a new Focus or Golf TDI are really compelling every-day use cars.
        • 3 Years Ago
        Yes, exactly. Drive a 335i right now and it is boring since reasonably enthusiastic street driving is only 20% of the car's abilities.

        I am going to move to cheaper and smaller, perhaps a new stripper Focus.
      • 3 Years Ago
      Wait, you can get a new car for under $15,000?
      • 3 Years Ago
      As vehicles become more reliable, the need to have that initial brand new warranty becomes less important when they can purchase a bigger and better vehicle thats a year or 2 old instead of having to resort to a bargain basement tin can.
        • 3 Years Ago
        > Is the age of the sub-$10,000 car passing?

        Yep... Right along with $3.00/gallon gas prices...
        • 3 Years Ago
        That's what I'm saying. for $10k I can get a pretty nice older Camry (or a 10 year old BMW) or something, so why would I buy a new car with no raido, roll up windows, no A/C, etc...
      • 3 Years Ago
      Cars are better, have to have more safety stuff on them, have more and more regulations to follow and in case you haven't noticed, the dollar is sliding fast against anything solid (in spite of what your government is telling you). If you doubt this, you aren't shopping for groceries.
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