Best new cars for grads and first-time car buyers

We've created a list of vehicles that should be good for grads or first-time car buyers. We capped our hypothetical investment at $25,000. With 20 percent down plus tax, title and license, that leaves a finance balance of $20,000. And that, over 60 months, gives us payments of approximately $370/month. Although that isn’t a small amount, within the context of college graduation and two years without payments we’re hoping it’s a formula that would work.

We've generally focused on cars with some utility such as hatchbacks and small crossovers. Frequent moves can be a fact of life for post grads, and having a versatile vehicle can be indispensable. We've also put a priority on fuel economy, general long-term running costs, and in a few instances, driving enjoyment, since we prefer cars with a pulse (and we hope you do too). 

Check out: Best New Cars Under $20,000

If we only recommended one car on this list, it would probably be the Fit. Quite frankly, it represents tremendous value for grads or any young car buyer. For starters, it provides unparalleled cargo and passenger space for a vehicle of its size (it outdoes many small SUVs). We know someone who put an entire four-place Ikea dining set inside a Fit – already assembled. You also get lots of equipment for much less than our $25,000 cap, including standard accident avoidance tech, a well-made cabin, excellent fuel economy and Honda's sterling reliability reputation. When it comes to a sensible purchase, this is it. 

Read our review of the 2019 Honda Fit Sport

Though it comes right up against our $25,000 target, the Niro is both a sensible and a fashionable choice. For starters, it has a crossover body style that is both popular and functional for driving around friends and carrying stuff during moves or road trips. However, the Niro is also a hybrid that should get well north of 40 mpg. There's also a plug-in hybrid eligible for hefty government tax rebates, and if you can park in a place with an electric outlet or charging station, it could make sense. 

Read our first drive drive of the Niro, as well as our follow-up review of the Niro Plug-In. 

If you're looking for a hybrid, the new Honda Insight is a tremendous choice. Besides getting better than 50 mpg, the Insight provides more equipment, more refinement and a more premium interior for the money than a Toyota Prius. It's also a lot less weird looking. Though not a hatchback, it's trunk is still plenty big and its five-person cabin surprisingly spacious. Both the base LX and very well-equipped EX can be had for less than $25,000. 

Now, if you're looking for something spicier, we would also consider the mechanically related Honda Civic Si. For a similar price tag, you'll trade fuel economy and comfort for an astonishingly fun car to drive for the money. It's available as a sedan or a coupe. 

Read our review of the 2019 Honda Insight

The "sub-compact" crossover segment was pretty underwhelming until the little Hyundai Kona came along. It pleasantly provides a sharp, engaging driving experience, and a pair of strong engine choices. Its styling is distinctive, the interior attractive yet user-friendly, and as a Hyundai, it's packed with features for the money and boasts a superior warranty. 

You can read about our time with the base 2.0L engine, as well as the sportier turbocharged model. 

Like its two preceding generations, the all-new 2020 Kia Soul offers loads of space and equipment for the money in a characterful, stylish package. Plus, this new 2020 version is offered in two new versions: the overtly sporty GT-Line and the X-line that boasts crossover-like body cladding and a generally more rugged appearance. These added variants, along with the Soul's many other updates for 2020, only add to its appeal. A sensible, yet still interesting choice.

Read our first drive review of the brand-new Kia Soul right here.

Unlike our previous two entries, there's nothing especially stylish or fun about the Nissan Kicks. However, it does represent tremendous value, offering more features and space for the money than any other sub-compact SUV. To be fair, it's barely one of those given its lack of ground clearance and all-wheel drive. In that light, it's more of an alternative to the Honda Fit. The Kicks may not be quite as spacious for cargo and passenger's as Honda's space-efficiency wonder but it does come close. Fuel economy is also excellent. 

Read our review of the 2018 Nissan Kicks in its top trim level, which still just tops $23,000. 

If you are hoping for a post-grad car with utility, this is most definitely not that. However, if you're seeking superlative driving fun for not a lot of money, this is exactly the time of your life when you should take of advantage of not needing more than two seats. There will be plenty of time later in life to worry about practicality. You're young, you want to have some fun, you want to consider a Miata. We know we would (and did!).

Click here to read our first drive review of the 2019 Mazda Miata.

If your idea of youthful fun is having it away from the car and out in the great outdoors, the Subaru Crosstrek is a superior choice. This photo may be a promotional one from Subaru, but take it from editors who live in the Pacific Northwest that seeing Crosstreks outfitted in a such a way is commonplace. People really do take advantage of the Crosstrek's standard all-wheel drive, huge ground clearance, easily accessed chunky roof rails and versatile hatchback cargo area. It's also fuel-efficient, well-equipped and well under our $25,000 price threshold. 

Click here to read our Subaru Crosstrek buyer's guide.

The Mazda 3 is all-new for 2019 and ups the ante on what was already one of our favorite compact cars. Available as a stylish sedan or hatchback, the Mazda 3 is the definitive "fun-to-drive" choice among cars in its segment and in this price range. It's also very efficient and this latest 3's interior borders on luxury car territory – yes, even cheaper versions. Its new, admittedly unusual hatchback design isn't as versatile as other hatchbacks in this price range (specifically the Honda Civic), but should still be better than the typical sedan. 

Read our first drive review of the 2019 Mazda 3.

Admittedly, the Compass is more appealing in its upper trim levels (especially the cool, off-road capable Trailhawk), however, this small Jeep still has a lot to offer on the low end. It packs in lots of features and it should be a just-right size for many. Fuel economy is decent too, especially for a Jeep. And as it's a Jeep, you get all that character and better off-road capability than most in a package that doesn't cost all that much.

Read our first drive review of the Jeep Compass