There are a few changes in 2012 versus the 2011 cheapest new cars list. Most notably, Chevy retired the drab and tired Aveo and replaced it with the beefed-up Sonic, which comes in as the 6th least expensive new vehicle. The brand new Scion IQ displaces the Scion XB, and comes in as the 5th lowest cost car for the 2012 model year. And the Fiat 500 Pop makes the list, in its inaugural model year. J-Lo would be proud.

A few returnees boost better fuel efficiency this year, particularly the Kia and Hyundai models as they move to improved 1.6L 6-speed automatic transmissions. I decided to include engine specs this year if you’d like to make comparisons.

All of the vehicles you will find on the list have automatic transmission. Why? It’s hard to find, negotiate, and re-sell manuals. If you are interested in manuals, each model, excluding the Scion’s have them. They to run roughly $1,000 less than the MSRP’s I quoted, but their limited availability may prevent your ability to find and negotiate (if you have 25 vs. 2 to choose from on a lot and other dealers locally have the same numbers, your negotiating power goes up).

The Used Vs. New Debate

Before running out any buying a shiny new car, do your homework to make sure it is the best use of your money. Be honest with yourself in evaluating whether you in fact need a car in the first place, and if you have a significant other, whether you need a second car.

If you do need a car, new cars might not present the best value for you – although, this list is a good place to start for value. If you get a new car, baby it, and ride it until its death, it is possible to get a better return for your investment than buying used. However, keep in mind that new cars lose 11% of their value as soon as they are driven off the lot, on average.

Other Factors to Consider with a Cheap Car

Beyond the prices I’ve listed, there are some other considerations you should have when shopping for a new car:

• Fuel economy is important. A Scion IQ, for example, would save you over $400 every year in fuel costs vs. the new Chevy Sonic. My source for fuel costs is fueleconomy.gov, which used a $3.23 average per gallon with 45% highway, 55% city miles, and 15,000 annual miles.
• New models are unlikely to offer up big incentives until the end of their model year. It’d be wise to wait. I did not factor incentives in to the prices listed.
• Ongoing costs and insurance costs for cheap cars is generally lower, but you don’t want to sacrifice safety. Make sure a car you choose rates high on safety.

Foreign Automakers Still Own the Market for the Cheapest Vehicles

Foreign Automakers claim ownership of 13 of the 15 cheapest new cars. Only the new Chevy Sonic and last year’s new Ford Fiesta make the list from the U.S. automakers. Topping the list with the most models are Kia (3), Scion (2), Nissan (2),and Honda (2). Smart, Hyundai, Chevy, Ford, and Toyota are each represented by one model on the list.

My Picks for the Most Improved & Best Cheapest New Cars of 2012

The Soul, Fit, and Fiesta are still personal favorites for their functionality, styling, and price. However, I have to hand it to the Versa for being a solid car with improved fuel efficiency (25 mpg to 30 city, and 33 to 38 in the city) and still comfortably being the second cheapest.

The once-ugly Kia Rio is now rather stylish, is $495 cheaper than last year, and jumps from 27 to 30 mpg city and 36 to 40 highway. It gets my pick for having the best improvement from last year to 2012.

Without further ado, here are the 15 cheapest new cars of 2012 from #15 up to #1. What’s your favorite?

15. Honda Civic

Base Automatic Transmission model: Honda Civic DX, 2-door Sedan
Engine: 1.8L, 5-speed Auto Transmission, 16-valve, 4 cylinder, 140 HP
MSRP: $17,175
Dealer Cost: $15,728
City MPG: 28
Highway MPG: 39
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The 2012 Civic is re-styled. With a $1,400 spread between MSRP and dealer cost, there may be room to negotiate.

14. Fiat 500

Base Automatic Transmission model: Fiat 500 Pop, 2-Door Hatchback
Engine: 1.4L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 101 HP
MSRP: $17,000
Dealer Cost: $15,905
City MPG: 27
Highway MPG: 34
Annual Fuel Cost: $1,785
Powertrain Warranty: 4 years or 50,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: As a guy, I hate to admit it (it’s definitely branded for the ladies), but this is kind of a cool car. Reminds me of the VW bug in appearances. The standard base model is pretty loaded in features. One disappointment? For a 1.4L, 6-speed, it gets very poor fuel economy.

13. Kia Forte

Base Automatic Transmission model: Kia Forte LX 4-Door Sedan
Engine: 2.0L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 156 HP
MSRP: $16,950
Dealer Cost: $15,644
City MPG: 29
Highway MPG: 36
Annual Fuel Cost: $1,671
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: Similar to the Kia Rio, but with more engine and slightly lower fuel economy.

12. Scion XD

Base Automatic Transmission model: Scion XD 4-Door Hatchback
Engine: 1.8L, 4-speed Auto Transmission, 16-valve, 4 cylinder, 128 HP
MSRP: $16,875
Dealer Cost: $15,755
City MPG: 27
Highway MPG: 33
Annual Fuel Cost: $1,671
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: If Scion wants to remain competitive with other automakers, they will need to focus on fuel efficiency. A 4-speed auto transmission is behind the game.

11. Honda Fit

Base Automatic Transmission model: Honda Fit 4-Door Hatchback
Engine: 1.5L, 5-speed Auto Transmission, 16-valve, 4 cylinder, 117 HP
MSRP: $16,745
Dealer Cost: $16,022
City MPG: 28
Highway MPG: 35
Annual Fuel Cost: $1,563
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Great functionality. Only comes in a hatch (it runs on a Civic base).

10. Kia Soul

Base Automatic Transmission model: Kia Soul 4-Door Hatchback
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $16,450
Dealer Cost: $15,379
City MPG: 27
Highway MPG: 35
Annual Fuel Cost: $1,615
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: 1.6L now available in 6-speed transmission, with better fuel economy.

9. Hyundai Accent

Base Automatic Transmission model: Hyundai Accent GLS, 4-Door Sedan
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,955
Dealer Cost: $15,239
City MPG: 30
Highway MPG: 40
Annual Fuel Cost: $1,468
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: I have not been in this car, but it has a cult-like following. 40 mpg highway is impressive.

8. Mazda 2

Base Automatic Transmission model: Mazda 2 Sport 4-Door Hatchback
Engine: 1.5L, 4-speed Auto Transmission, 16-valve, 4 cylinder, 100 HP
MSRP: $15,775
Dealer Cost: $14,354
City MPG: 28
Highway MPG: 34
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Has 4-speed auto trans vs. its cousin Fiesta’s 6-speed, giving it lower fuel economy. It does, however, offer a better warranty than the Fiesta.

7. Toyota Yaris

Base Automatic Transmission model: Toyota Yaris 2-Door L (Liftback/Hatchback)
Engine: 1.5L, 4-Speed Auto Transmission, 16-valve, 4 cylinder, 106 HP
MSRP: $15,600
Dealer Cost: $15,033
City MPG: 30
Highway MPG: 35
Annual Fuel Cost: $1,514
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Solid car is now restyled. Like the Scion, it’d benefit with value seekers in a move from a 4 to 6-speed engine.

6. Chevy Sonic

Base Automatic Transmission model: Chevy Sonic 2 LS 4-Door Sedan
Engine: 1.8L, 6-speed Auto, 16-valve, 4 cylinder, 138 HP
MSRP: $15,565
Dealer Cost: $14,973
City MPG: 25
Highway MPG: 35
Annual Fuel Cost: $1,730
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: New model from Chevy that replaces the Chevy Aveo. Would love to see this in a 1.4L in future years for improved mpg’s. 25 city is low for a car of this size.

5. Scion IQ

Base Automatic Transmission model: Scion IQ 2-Door Hatchback
Engine: 1.3L, Continuously Variable Auto Transmission (CVT), 16-valve, 4 cylinder, 94 HP
MSRP: $15,265
Dealer Cost: $14,936
City MPG: 36
Highway MPG: 37
Annual Fuel Cost: $1,309
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: New model from Scion, the IQ launches in California now and Midwest in March. It has the highest city MPG of any non-hybrid. It doesn’t look to be much bigger than a Smart Car, but has a bulkier build with big wheels.

4. Kia Rio

Base Automatic Transmission model: Kia Rio LX 4-Door Sedan
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,250
Dealer Cost: $14,325
City MPG: 30
Highway MPG: 40
Annual Fuel Cost: $1,468
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: $495 price decrease bumps it from #7 to #4 on the list. It also moves from 4 to 6-speed, bumping fuel economy from 36 to 40 on the highway. All of this, and its improved styling makes it the most improved car from 2011 to 2012.

3. Ford Fiesta

Base Automatic Transmission model: Ford Fiesta S Sedan, 4-Door
Engine: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
MSRP: $15,090
Dealer Cost: $14,157
City MPG: 33
Highway MPG: 39
Annual Fuel Cost: $1,468
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Great car. But the bigger (and not much more expensive) Focus is worth a look.

2. Nissan Versa

Base Automatic Transmission model: Nissan Versa Sedan 1.6S, 4 Door
Engine: 1.6L, Continuously Variable Auto Transmission (CVT), 16-valve, 4 cylinder, 109 HP
MSRP: $13,520
Dealer Cost: $12,907
City MPG: 30
Highway MPG: 38
Annual Fuel Cost: $1,468
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Some nice improvements in 2012 versus 2011. MPG’s jump from 25 and 33 with the continuously variable transmission. With its price, it deserves a look.

1. Smart ForTwo Pure

Base Automatic Transmission model: Honda Fit 4-Door Hatchback
Engine: 1.0L, 5-speed Auto Transmission, 12-valve, 3 cylinder, 70 HP
MSRP: $12,490
Dealer Cost: $11,991
City MPG: 33
Highway MPG: 41
Annual Fuel Cost: $1,458
Powertrain Warranty: 2 years or 24,000 miles
Limited Basic Warranty: 2 years or 24,000 miles
Notes: Good, but not ground-breaking mileage in a golf cart size, the worst warranty in the business, and a price that does not entirely set it apart from the competition? Other than being the cheapest car, it comes up a bit short.

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The Top 15 Cheapest New Cars of 2012 is copyrighted by 20somethingfinance.com without consent to republish.

What is a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)

To break this down, you must first know the lingo. When you rent a car and are offered ‘coverage’ or ‘insurance’, you’re offered a CDW/LDW damage waiver. It’s not really an insurance policy, rather you are paying the rental company for them to take responsibility (as they are already insured) in the event of damage or theft, versus passing it along to you.

Liability Insurance vs. CDW

Note that CDW and LDW’s don’t cover liability protection (in the event you harm someone or something and legal action is brought against you). Rental providers charge additional fees for this coverage. If you have a personal auto insurance plan, you’re likely covered on rentals (but you should check to be sure).

Before you rent your next car, you should look into the following:

Does your Personal Auto Insurance Policy Cover Damage/Theft on Rentals?

It just might. Every policy differs, and this is something that you can usually add in. If it does not, that’s where your credit card might come in handy. Credit cards often protect you in the event that you don’t have the coverage via your primary auto insurance. However, if you do have the coverage via your auto insurance, it defaults to them.

Rental Car Insurance Coverage from Credit Cards

Credit card companies do not cover liability, but most do have a CDW/LDW type coverage.

American Express: The American Express car rental coverage page suggests that you can say “No Thanks” when offered CDW or a similar option.

Visa: The Visa car rental coverage agreement states, “When certain terms and conditions are met, the Visa Auto Rental Collision Damage Waiver benefit (“Auto Rental CDW”) provides—at no additional charge—reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles.” Sounds like you’re covered.

MasterCard: The MasterCard car rental coverage agreement claims, “Mastercard pays for covered damages (physical damage and theft) to a rental vehicle when your eligible MasterCard card is used to initiate and pay for the entire rental transaction.”

Discover: The Discover car rental coverage is a little more precise. It says, “Your Discover Card comes with a Car Rental Insurance Plan that provides $25,000 of secondary collision damage insurance when you rent a car using your Discover Card and decline coverage offered by the rental agency.”

Some Cautions Before Relying on your Credit Card for Damage & Theft Coverage

It might not always make sense to rely on your credit card for CDW coverage. Always take the following precautions:

• Read the fine print. Find out how much your specific card covers, under what rental day lengths, if it covers theft, etc.
• Note that debit cards often do not carry the same coverage.
• You must actually use the credit card you want protection from on the purchase. Makes sense.
• Call the company and file the claim immediately (that day or the next day). All providers have a specified period after which notification and claims are no longer accepted.

Car Rental Insurance Checklist:

Here is how I’m going to approach making sure that I’m covered before my next car rental.

1. I will call my primary insurance provider to:

Find out if liability protection is extended to rentals. If it is not, how much would it cost to add it? Compare this to what rental companies charge and go with the cheaper option.

Find out if collision, other damage, and theft are extended to rentals. Again, if it is not, how much would it cost to add it and would it be better to pay for this than just use my credit card protection?

2. I will see what kind of coverage my credit card provider has.

If it’s not enough and my primary insurance provider doesn’t cover it, that is really the only time I’d need to purchase a CDW. And even then, if this is a business trip, find out if your corporate card has better coverage than your personal.

If you’re covered, decline CDW.

That’s it! A half hour of research or so will go a long ways to easing your mind and saving you some money every time you rent.

Car Rental Discussion:

• Have you ever been in an accident or had a car rental stolen? What happened? Who foot the bill?
• Do you still purchase CDW even if your personal plan or credit card has you covered? Why?

Related Posts:

• Auto Insurance Quote Tips
• How to Save on Auto Insurance
• Cheapest New Cars of 2012

Do you Need to Buy Rental Car Insurance? is copyrighted by 20somethingfinance.com without consent to republish.

My 2010 cheapest cars report covered the top 10 low-cost vehicles. This year, I bumped it to 15, because a few of my favorites didn’t quite make the top 10. ALL of the vehicles you will find on the list have automatic transmission. I don’t drive a stick myself, and I’m sure many of you don’t either. However, if you are interested in manual trans, all of these vehicles have a version, and they generally run about $1,000 less than the MSRP’s I quoted.

Update: I have since published a list of the 2012 cheapest new cars.

The New Car Caveat

Before we get started, I’ll once again give the caveat that I am not an advocate of buying new cars, however, I do believe that if you buy a cheap new car and drive it into the ground, there is a good chance that it could comparatively save you money versus buying used. Want the best of both worlds? The 3-year resale value of these vehicles is usually around 55-60% and the 5-year resale value is often around 40%.

You’ll notice I also listed dealership costs, which should give you an idea of how much room you have to haggle. The Honda Civic and Hyundai Accent should have a lot of wiggle room, with over $2,000 in difference between dealer cost and MSRP. The Mazda 2 and Kia Rio, on the other hand, are actually both priced below dealer cost, making them loss leaders for the dealership. Wiggle room will be tight.

Current incentives were not factored into the prices, and a few models actually did have up to $1,000 cash back incentives at the moment.

Fuel, Maintenance, & Insurance Costs on Cheap Cars

Other than the price itself, cheap cars tend to have much lower total ownership costs than their more expensive brethren. Small and cheap tend to go hand-in-hand, and so do small and fuel efficient. Most of the vehicles on this list have an average EPA estimated MPG of over 30. The one year fuel cost estimates were based on 45% highway driving, 55% city driving, 15,000 annual miles, and $3.07 for a gallon of regular gasoline (source: fueleconomy.gov).

Maintenance costs are usually cheaper as well. The goal of auto manufacturers is to produce these vehicles as inexpensively as possible. Therefore, their parts are cheap. And so are their replacement parts. And because these vehicles tend to be popular, their parts are easy to find, reducing scarcity and lowering prices.

Insurance costs on these cars are usually lower as well because insurance costs are derived from the market value of the vehicle. The lower the cost of vehicle, generally, the lower the cost of insurance for it.

Once Again, Foreign Automakers Dominate the List of Cheapest Vehicles

All but two of the vehicles to make this year’s list were from foreign automakers. The two that did? The underwhelming Chevy Aveo and the brand new Ford Fiesta. Disappointing, but I have no doubts that you’ll see U.S. automakers continue to make the shift to smaller, cheaper cars in the very near future.

My Picks for the Best Cheapest Car of 2011

It’s a toss-up. I’m a huge fan of functionality, so hatchbacks and utility are big wins in my book. Also, if I’m going to buy a new vehicle, it’s not going to be ugly. I’m going to go with the Fiesta. It’s stylish, and excluding the only golf cart to make the list (ForTwo), the most fuel efficient. The hatchback also gives it functionality. The Soul and Fit come in a close second.

15. Scion XB

Base Automatic Transmission model: Scion XB 2.4L
MSRP: $16,950
Dealer Cost: $16,494
City MPG: 22
Highway MPG: 28
Annual Fuel Cost: $1,920
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Not the most fuel efficient or attractive, but it does boast the most powerful engine of the bunch.

14. Nissan Cube

Base Automatic Transmission model: Nissan Cube 1.8S
MSRP: $16,650
Dealer Cost: $15,536
City MPG: 27
Highway MPG: 31
Annual Fuel Cost:  $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Ugly, but in an endearing, futuristic way. The Cube is spacious and functional, which is definitely appreciated in a small, cheap vehicle.

13. Honda Civic

Base Automatic Transmission model: Honda Civic DX, 2-door 1.8L
MSRP: $16,605
Dealer Cost: $14,708
City MPG: 25
Highway MPG: 36
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: What can you say? It’s a classic amongst frugal deal seekers. It has stood the test of time longer than any other entry, and probably for good reason.

12. Kia Soul

Base Automatic Transmission model: Kia Soul 2.0L I4 A/T
MSRP: $16,495
Dealer Cost: $16,168
City MPG: 26
Highway MPG: 31
Annual Fuel Cost: $1,644
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: What’s not to like about the Kia Soul? It’s probably the best looking vehicle of the bunch, it’s functional, and it’s got that awesome warranty on top of it.

11. Kia Forte

Base Automatic Transmission model: Kia Forte LX 2.0L I4 6-speed A/T
MSRP: $15,995
Dealer Cost: $15,052
City MPG: 26
Highway MPG: 36
Annual Fuel Cost: $1,589
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: A sleeper in the bunch. Sleek, fuel efficient, and that great Kia warranty.

10. Scion XD

Base Automatic Transmission model: Scion XD 1.8L
MSRP: $15,970
Dealer Cost: $15,466
City MPG: 27
Highway MPG: 33
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Not a bad looker, but the interior looks tight.

9. Honda Fit

Base Automatic Transmission model: Honda Fit 1.5L Hatchback
MSRP: $15,900
Dealer Cost: $14,991
City MPG: 28
Highway MPG: 35
Annual Fuel Cost: $1,487
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The Honda Fit might have the best combination of price, functionality, and fuel economy. It’s hard to be in terms of pure value.

8. Chevy Aveo

Base Automatic Transmission model: Chevy Aveo Sedan 4-door
MSRP: $15025, the 5-door Aveo 5 Hatchback comes in at just $150 more ($15,175)
Dealer Cost: $14,920
City MPG: 25
Highway MPG: 34
Annual Fuel Cost: $1,644
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: It’s time for GM to give the Aveo a much needed face-lift.

7. Kia Rio

Base Automatic Transmission model: Kia Rio LX 1.6L I4 A/T
MSRP:  $14,995
Dealer Cost: $15,052
City MPG: 27
Highway MPG: 36
Annual Fuel Cost: $1,533
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: I just get a feeling of cheap when I look at this car. And not in a good way.

6. Mazda 2

Base Automatic Transmission model: Mazda 2 Sport 1.5L Hatchback
MSRP: $14,980
Dealer Cost: $15,054
City MPG: 27
Highway MPG: 30
Annual Fuel Cost: $1,589
Powertrain Warranty: 5 years or 100,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Wow, where did this one come from? Fuel economy isn’t the greatest for a 1.5L, but you have to appreciate the price. This is a new entry to the market this year.

5. Hyundai Accent

Base Automatic Transmission model: Hyundai Accent GS 1.6L 3-door hatchback
MSRP: $14,695
Dealer Cost: $12,546
City MPG: 27
Highway MPG: 36
Annual Fuel Cost: $1,533
Powertrain Warranty: 10 years or 100,000 miles
Limited Basic Warranty: 5 years or 60,000 miles
Notes: Good warranty and there’s definitely wiggle room on the price with the difference between MSRP and dealer cost.

4. Ford Fiesta

Base Automatic Transmission model: Ford Fiesta S Sedan 1.6L 6-speed
MSRP: $14,390, Hatchback version runs at $16,190
Dealer Cost: $12,936, $15,473 for the hatchback
City MPG: 29
Highway MPG: 40
Annual Fuel Cost: $1,533
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: Love it. I showered praise in my Ford Fiesta review last year, and it’s lived up to the hype in its first year. Peppy, fun, and very fuel efficient. Downside? The much better looking hatchback jumps up in price significantly over the sedan.

3. Toyota Yaris

Base Automatic Transmission model: Toyota Yaris 3 Door Liftback, 4 Speed Auto
MSRP: $13,755
Dealer Cost: $12,517
City MPG: 29
Highway MPG: 35
Annual Fuel Cost: $1,487
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The hatchback is an attractive little guy, but I’m not sure it’s as functional as some of its peers due to its small size.

2. Nissan Versa

Base Automatic Transmission model: Nissan Versa Sedan 1.6L, 4 Door
MSRP: $12,990 ($14,940 for the hatchback)
Dealer Cost: $12,337
City MPG: 25
Highway MPG: 33
Annual Fuel Cost: $1,644
Powertrain Warranty: 5 years or 60,000 miles
Limited Basic Warranty: 3 years or 36,000 miles
Notes: The hatchback might be the sleeper in the whole bunch. It’s very spacious and cheap.

1. Smart ForTwo

Base Automatic Transmission model: Smart ForTwo Pure Coup 1.0L
MSRP: $11,990
Dealer Cost: $11,516
City MPG: 33
Highway MPG: 41
Annual Fuel Cost: $1,380
Powertrain Warranty: 2 years or 24,000 miles
Limited Basic Warranty: 2 years or 24,000 miles
Notes: There should be an asterisk next to this entry. Yes, technically, it’s a highway approved vehicle, but it’s little more than a souped up golf car, in my opinion. Everything about this car says ‘cheap’, and not in a good way. And it has an industry worst 2 year, 24,000 mile warranty to back it. For what you actually get, I’d expect this car to retail for about $8k.

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The Top 15 Cheapest New Cars of 2011 is copyrighted by 20somethingfinance.com without consent to republish.

What Auto Insurance Provider has the Cheapest Policy?

I wish I had a silver bullet for you on this one. I don’t. The lowest cost auto insurance policy depends on so many different factors, that you simply need to call around and do your research. The best I can do is help you prepare for those calls or online quotes and know what to ask for when doing them.

How to Prepare Before Getting Auto Insurance Quotes

Any time you are getting a true auto insurance quote versus simply filling out a lead marketing form submission, you’re going to need the following and why it might result in a lower cost for you:

1. The Car: the year, make, model, and any safety features. Older vehicles with more safety features should result in lower costs.
2. Your Driving Record: What accidents/tickets have you had in the last 3 and 5 years? Some auto insurance providers look at your 3 year record, others look at your 5 year record.
3. The Mileage: How many miles do you drive per year? The fewer the better at most insurers. Many will give you a discount for lower miles driven.
4. Credit Score: More and more insurers are offering auto insurance discounts for good credit scores.
5. How Much Coverage you want: Each state has different auto insurance coverage minimums. Know what yours are and how much coverage you want before getting your quotes, so that you can compare apples to apples.
6. Your Deductible: The higher your deductible, the lower your insurance premium. Your deductible is the amount you must pay when filing an insurance claim for repair/replacement. You’ll need to figure out what deductible amount you are comfortable with based on the age/make of your vehicle and your financial situation.

What Auto Insurance Companies Should you Get Quotes from?

There are so many options out there. I usually check with at least 3-5 companies before choosing. Here’s where you can start:

1. Check with whatever company you have home, life, and/or health insurance with. Multiple policy discounts are usually one of the biggest discounts in the industry.
2. Check with your employer. Some employer’s have negotiated lower rates for employees. Yours may be one.
3. Check with auto insurance companies that offer unique plans that cater to your driving or life situation. More on this point next.

Auto Insurance Discounts for your Situation:

A lot of companies will offer discounts for multiple policies, good driving records, multiple car discounts. But it really does vary by company as to which discounts they offer. Here are some examples of some situational offerings by various insurers:

• ESurance: ESurance offers auto dicounts for good drivers, students under the age of 25 who maintain a 3.0 GPA and above, and customers who pay their insurance in full vs. month-to-month.
• GEICO: Renewal discounts up to 30%, military discounts of 15%, anti-theft systems and full frontal airbags discounts.
• Allstate Auto Insurance: Discounts for defensive driving classes, no accidents in 3 or 5 years, and economy and new vehicle discounts.
• Travelers Insurance: Hybrid vehicle, drivers training, and multi-car discounts.

Auto Insurance Discussion:

• What is the most unique auto insurance discount you have received?
• How often do you get an auto insurance quote?
• What are you currently paying for auto insurance?
• What is the largest discount you are receiving right now?

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How to Get the Most Out of Auto Insurance Quotes is copyrighted by 20somethingfinance.com without consent to republish.

That being said, below is a list of the 10 cheapest vehicles of 2010 (from most to least expensive), based on MSRP. If you only buy used, go out and get one of these models in 3 years as their resale values are typically only about half of MSRP.

Foreign Automakers Dominate The List of Cheapest Vehicles

You’ll find that foreign automakers swept the list: Nissan (2), Scion (2), Toyota (1), Hyundai (1), Kia (3), and Honda (1). At these prices, the 2011 Ford Fiesta would jump in at the #5 spot next year at a price of $15,065 for the automatic s sedan model. It would also be the most fuel efficient with 30 mpg city and 40 mpg highway.

I decided to include only the automatic transmission versions of the models to compare apples to apples (sorry stick shift lovers). All associated costs are included. Sources include Vincentric, kbb.com, Edmunds.com, fueleconomy.gov, and each automaker’s website.

My Picks for Best Cheapest Vehicle of 2010

Based on price, aesthetics, and reputation, my money is on the Kia Soul, Nissan Versa, or Honda Fit. I’d stay away from Toyota and any of their brands, including Scion, at the moment. Next year, I’d put my money on the Fiesta. I’ve really been impressed with the quality of vehicles that Ford has been putting out lately.

Update: I have now published a list of the cheapest new cars of 2011 and 2012 cheapest new cars. Check them out!

10. Nissan Cube S 4dr hatch

Suggested retail price: $16,750
Dealer cost: $16,181
New Car Blue Book Value: $NA
5-year maintenance cost: $2,210
5-year repair cost: $916
Total 5-year service cost: $3,126
1-year insurance cost: $931
3-year resale value: NA%
5-year resale value: NA%
City MPG: 28
Highway MPG: 30
1-year fuel cost: $1,480
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles

9. Scion xB 4dr hatch

Suggested retail price: $16,420
Dealer cost: $15,632
New Car Blue Book Value: $16,420
5-year maintenance cost: $2,134
5-year repair cost: $924
Total 5-year service cost: $3,058
1-year insurance cost: $961
3-year resale value: 60%
5-year resale value: 42%
City MPG: 22
Highway MPG: 28
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles
1-year fuel cost: $1,755

8. Honda Fit 4dr hatch

Suggested retail price: $16,410
Dealer cost: $15,858
New Car Blue Book Value: $16,410
5-year maintenance cost: $1,638
5-year repair cost: $916
Total 5-year service cost: $2,554
1-year insurance cost: $941
3-year resale value: 59%
5-year resale value: 40%
City MPG: 28
Highway MPG: 35
1-year fuel cost: $1,389
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles

7. Scion xD 4dr hatch

Suggested retail price: $16,270
Dealer cost: $15,490
New Car Blue Book Value: $NA
5-year maintenance cost: $2,055
5-year repair cost: $916
Total 5-year service cost: $2,971
1-year insurance cost: $941
3-year resale value: 56%
5-year resale value: 40%
City MPG: 27
Highway MPG: 33
1-year fuel cost: $1,453
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles

6. Kia Rio LX 4dr

Suggested retail price: $15,390
Dealer cost: $14,895
New Car Blue Book Value: $NA
5-year maintenance cost: $2,147
5-year repair cost: $770
Total 5-year service cost: $2,917
1-year insurance cost: $899
3-year resale value: NA%
5-year resale value: NA%
City MPG: 27
Highway MPG: 36
1-year fuel cost: $1,405
Powertrain warranty: 10 years, 100,000 miles
Limited basic warranty: 5 years, 60,000 miles

5. Kia Forte LX 4dr

Suggested retail price: $15,390
Dealer cost: $15,105
New Car Blue Book Value: $15,390
5-year maintenance cost: $2,300
5-year repair cost: $965
Total 5-year service cost: $3,265
1-year insurance cost: $938
3-year resale value: 45%
5-year resale value: 28%
City MPG: 25
Highway MPG: 34
1-year fuel cost: $1,506
Powertrain warranty: 10 years, 100,000 miles
Limited basic warranty: 5 years, 60,000 miles

4. Kia Soul 4dr hatch

Suggested retail price: $13,995
Dealer cost: $13,450
New Car Blue Book Value: $13,995
5-year maintenance cost: $2,361
5-year repair cost: $965
Total 5-year service cost: $3,326
1-year insurance cost: $929
3-year resale value: 54%
5-year resale value: 37%
City MPG: 26
Highway MPG: 31
1-year fuel cost: $1,524
Powertrain warranty: 10 years, 100,000 miles
Limited basic warranty: 5 years, 60,000 miles

3. Toyota Yaris 2dr hatch

Suggested retail price: $13,905
Dealer cost: $13,247
New Car Blue Book Value: $13,905
5-year maintenance cost: $2,231
5-year repair cost: $916
Total 5-year service cost: $3,147
1-year insurance cost: $914
3-year resale value: 54%
5-year resale value: 37%
City MPG: 29
Highway MPG: 35
1-year fuel cost: $1,360
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles

2. Hyundai Accent GS 2dr hatch

Suggested retail price: $13,715
Dealer cost: $13,380
New Car Blue Book Value: $13,715
5-year maintenance cost: $NA
5-year repair cost: $NA
Total 5-year service cost: $NA
1-year insurance cost: $NA
3-year resale value: 41%
5-year resale value: 24%
City MPG: 27
Highway MPG: 36
1-year fuel cost: $1,405
Powertrain warranty: 10 years, 100,000 miles
Limited basic warranty: 5 years, 60,000 miles

1. Nissan Versa 4 Door

Suggested retail price: $12,710
Dealer cost: $12,423
New Car Blue Book Value: $12,710
5-year maintenance cost: $2,222
5-year repair cost: $1146
Total 5-year service cost: $3,368
1-year insurance cost: $883
3-year resale value: 53%
5-year resale value: 31%
City MPG: 26
Highway MPG: 33
1-year fuel cost: $1,487
Powertrain warranty: 5 years, 60,000 miles
Limited basic warranty: 3 years, 36,000 miles

Cheap Car Discussion:

• Do you own any of these vehicles? If so, would you recommend it or not?
• Do you only buy used or new vehicles? Why?
• Any automaker, including Ford, that you’d recommend or urge to stay away from?
• Has the recent series of Toyota recalls changed your views of Toyota?

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• How to Save on Auto Insurance
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• My Service Engine Light is on

The Top 10 Cheapest New Cars of 2010 is copyrighted by 20somethingfinance.com without consent to republish.

In a life changing event, that is. Hyundai has begun to promote a new program that claims that “if you cannot make your payment because of a life changing event, we’ll allow you to return your vehicle and walk away from your loan obligation – and in most cases, we will cover most, if not all of the difference”. This program is good up to one year, post purchase, and at least two payments must be made in order for it to become effective. But is it a good deal?

What is a ‘Life Changing Event’ According to Hyundai?

According to Hyundai, it could be one of the following:

• involuntary job loss
• physical disability
• loss of license due to medical impairment
• personal bankruptcy if self-employed
• getting transferred overseas
• accidental death

Looking into this a bit further, the plan is managed by an auto dealer insurance and finance company called Walkaway. Hyundai appears to be the only automaker using this offer on a national level, but other automakers could potentially offer something similar through Walkaway or another provider. Hyundai has previously sold this program in Canada as an add-on insurance product for buyers and lessees. However, this time, it looks like Hyundai is footing the bill.

Thoughts on the Assurance Promotion

• I’m sure the Hyundai has run some numbers to see if this promotion makes sense for them financially. So any new sales that they wouldn’t have had from those overwhelmed by fear in the current economy and all of the free publicity that comes from it (sorry GM, Ford, and Chrysler) is an added bonus for them.
• I’d suggest reading all of the fine print before jumping at a promotion like this. The ‘and in most cases, we’ll cover most, if not all the difference’ line is incredibly vague. That’s two too many ‘mosts’ for my blood.
• It is a clever promotion, I must say, and I’d love to see U.S. automakers try something creative like this out. What have they got to lose? They might as well go out with a bang, right?
• I’ve driven a few Hyundai’s, I don’t like them. Buy American, not only to save your neighbor’s job, but because the quality these days is as good or better.
• From a personal finance perspective, if you are so concerned about potential negative equity from an auto purchase or lease that you are willing to make a purchase for re-assurance, you are probably getting the wrong car (or getting a car for the wrong reasons). There are plenty of great used vehicles out there that are depreciating at a much slower rate and are much cheaper than those just driven off the lot.

Your Thoughts on Hyundai Assurance?

• Does this promotion appeal to you at all?
• Would it make you switch from another automaker to Hyundai?
• Are you considering a new vehicle purchase or lease due to, or in spite of the current economy?

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Hyundai will Take your Car Back (Most of the Time) is copyrighted by 20somethingfinance.com without consent to republish.

This is a guest post from Joanne Kwan, who provides sound advice for those facing the used versus new car decision for the first time.

When it comes to buying a car, there are two options: new and used, and as a young professional, for whom this may be the first automobile purchase not funded by the Bank of Mom and Dad, there are valid reasons to consider each. Used cars are less expensive to buy, and are often less expensive to insure as well, while new cars often have a much broader array of safety and anti-theft devices. There are a number of excellent websites at your disposal to help you locate used car deals, new car rebates, and more information than you probably thought possible about mileage, performance, engine specs, and prices.

Questions to Ask Before you Purchase a Car

Even with the abundance of information at your disposal, there are three basic questions you need to answer, before you begin to shop:

1. What is the reason for the purchase? Are you buying a new car because you need to replace a vehicle that isn’t working correctly, or are you upgrading your car to reflect a recent promotion or other change in status?

2. How much can you afford? Even with rebates, new cars are significantly more expensive than used cars, and if you go to a dealer even previously-owned vehicles can be financed. Do you have a down payment? How much of a monthly payment can you make?

3. How will you use this car? If you’re the type who drives between home, work, and the grocery store, and maybe goes to dinner with friends, or on a date with your significant other from time to time, you might be fine in a vehicle that’s a little older. On the other hand, if you’re in a sales position, and have to travel for work, or like to take off on long weekend road trips, a new car may be the wisest choice for you.

Generally speaking, if you have enough money to make a decent down payment without dipping into your investments, and can make a monthly payment for three or four years without stretching your budget too badly, and have good-to-excellent credit, a new car is within your reach. If any of these things pose a problem, you may want to consider getting a used vehicle, off of Craigslist, for example.

Advantages of Buying New Cars:

The advantages of new cars include:

• Most up-to-date safety and anti-theft devices
• Less likely to require maintenance
• Better performance
• Vehicle will be under warranty

Before going to a dealer to shop for new cars, you should find a lender and set up financing. While you can use dealer-provided financing, you are not required to do so, and may get a better APR (annual percentage rate) by arranging your own. If you are a member of a credit union, you probably have access to excellent auto loan opportunities.

As well, you should hit the Internet and do some research on the specific makes and models you’re considering. Compare safety features and fuel economy, check suggested prices, and determine which optional accessories you need and which you merely want, or can live without. By doing this, you’ll be negotiating from a more equal position, and will be able to get the lowest price possible.

Advantages of Buying Used Cars

Used cars are not without their advantages, either. Among them are:

• Less expensive to buy
• Insurance tends to cost less.
• Unless the vehicle is rare or otherwise unique, they’re less likely to be stolen

Questions to Ask yourself when Purchasing a Used Car

Purchasing a used car takes a bit more education than buying a new car. Whether you’re going through a dealer for one of their “previously owned” vehicles, or buying direct from an individual, you should consider the following:

• What is the car’s condition? Are the parts original, or have they been replaced? How old are the parts? Has the vehicle been well-maintained?
• How old is the car? If it’s more than six years old, or the mileage seems either too high or too low relative to the age of the car, be very wary.
• How’s the paint job? Does the paint feel smooth and sleek, or does it seem to be hiding dents or rust. Does it feel patchy? Perhaps there was body damage.
• Is the original paperwork, including the owner’s manual, available?

If all of these questions have been answered to your satisfaction, you’ll want to obtain a vehicle history report from a service such as CarFax (most used-car dealers will provide this. Insist upon it if they don’t), to make sure the car was never reported stolen or involved in an accident that caused significant damage. It’s also a good idea to find out what similar cars are selling for, to make sure the price you pay is fair.

If your used car is coming from a dealer, be sure to ask about any warranties or guarantees. Most certified pre-owned vehicles come with some sort of protection plan.

Getting the Best Deal on Car Insurance

Whether you ultimately choose to purchase a new or used vehicle, be certain to arrange for your car insurance quote at the same time you arrange financing. Be prepared for the fact that a financed car will generally have to be covered with comprehensive and collision policies as well as your state’s required liability and uninsured motorist coverage.

If you own a house or are self employed, you’ll want to make sure your auto insurance coverage is more than the minimums, so that you can protect your home or business if you are sued because of involvement in an accident, and never, EVER, let your insurance lapse.

A new car, whether it’s fresh from the dealer’s lot, or merely new-to-you is always exciting. By using the tools available on the ‘net, and knowing what to ask about when you shop, your new car experience will be a pleasant one.

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Should I Buy a New Car or a Used Car? is copyrighted by 20somethingfinance.com without consent to republish.

When trying to save money on auto insurance: Don’t try to take pictures from the driver seat of a passing Toyota Scion that’s styled in memory of the majestic A-Team van while driving on a four lane highway.

Do you Need Auto Insurance?

Yes. Auto insurance is one of those things that you hate to have to pay for, but you just need to have. Just about every state requires at least some level of auto insurance coverage.  Most states want you to at least have some legal liability coverage, but just how much varies by state.

Most states have publications on purchasing auto insurance available, which many times will run comparisons on prices over a wide range of insurers. Your state probably has a publication printed, courtesy of your tax dollars as well.

Why should I focus on saving money on auto insurance?

When you are using a monthly budget, I highly recommend taking a look at all of the expenses that you must pay each month and then target ways that you can slice those expenditures down. Auto insurance is certainly one expense that you have to budget for where doing a little research and making some calls can pay huge dividends in both the short and long term. With little time invested, you can potentially save hundreds a year and tens of thousands over your lifetime.

There are a lot of choices when it comes to auto insurance and each insurer may offer you different discounts at varying levels. We’re going to cover some of the big ones. Once you know all of the discounts that you may be eligible for, you can shop around.

What single factor will allow you to pay as little as possible for auto insurance?

Before you take a look at all the discounts that may be available to you, let’s first discuss the one factor that will allow you to pay the least for auto insurance: your ego. Nobody other than your ego really cares what vehicle you drive and most vehicles end up being worthless over time, so why not get a safe, older, inexpensive vehicle that has depreciated enough to cost little to insure?

Auto Insurance Discounts

When it comes to corporate profitability, insurance is a game of numbers. If you’ve had five heart attacks, the odds of you finding a company to insure you and cover your medical expenses for the sixth are highly improbable. Similarly, auto insurers have run all kinds of mathematical models in which they have been able to discover indicators that point to certain characteristics or features that lead to more or less of a risk for them to insure you.

Insurers want to attract and reward safe drivers who have a low probability of getting in an accident. They have no problem offering discounts for indicators that tell them that insuring you will be of less risk than the average driver. The following are 11 auto insurance discounts that you may be eligible for that will help you save on auto insurance:

1. College degree or alumni discounts: Many of the big insurers will give you a discount just for graduating or being an alumni of certain educational institutions. That makes the thousands in student loans you owe almost worth it, eh? Some insurers even offer discounts for high G.P.A’s.
2. Employee discounts: Those in certain professions have proven to be better drivers than others (i.e. teachers, engineers, scientists) and as such, they can get discounts. Some companies may offer a discount based on profession, others will offer it based on employer.
3. Good driving record discount: Most major insurers will look back at either your 3 or 5 year history in terms of accidents and traffic violations. This can come into play if you have had either circumstance happen between the period of 3 to 5 years ago. If this is the case, you may be able to get a better price from a company that only looks at the last 3 years time. Similarly, if you had violations when signing up with a company but they have since gone over that time threshold, you may now be eligible for a better rate. Don’t expect to get this automatically. It pays to ask.
4. Short commute or low mileage discount: Some companies will give you a discount for living closer to work or for being an infrequent driver. Makes perfect sense, right? The less you drive, the less likely you are to get in an accident.
5. Safe vehicles discount: If your car has a security alarm or theft deterrent system, it is less likely to be broken into. This could get you an added discount. Additionally, you may be able to find discounts for anti-lock brake systems, automatic seat belts, airbags, and other types of safety features.
6. Age discount: You can usually get a good discount if you’re 55 and over or have an AARP membership. I realize that this isn’t the demographic for this site, so file it away in your back pocket for a few decades.
7. Military: If you were one of the few and proud, you are probably also going to save some cash on auto insurance.
8. Multiple vehicle discount: If you live in a two, three, or dare I say, four car household, having multiple vehicles on the same policy may warrant a discount.
9. Multiple policy discounts: Just about all of the major insurers will give you discounts if you also are insured, or become insured through them for other types of policies, including life, home, and disability. It might be worth the time to see if you’d be paying less overall if you took the cheapest coverage for each type of insurance or went with the same company for all.
10. Pay up front discount: Some companies may offer you a discount if you pay your yearly premium up front versus paying separately each month. If you can afford to do this it might be worth it. Don’t worry, if you find a better rate and want to switch, you are entitled a return for the remainder of the year.
11. Your credit history: Yes, your credit score can come back to haunt or benefit you once again.

Auto Insurance Discount Pages for All Major Insurance Companies

I have included the discount pages for many of the major auto insurers, below:

• Allstate
• Geico
• Nationwide
• Progressive
• State Farm
• E-Surance
• Liberty Mutual – my personal auto insurance provider. Check out my money saving products page for more.

How to Get your Auto Insurance Discount

Now that you know how much insurance you need and how you can save on it, you’ll basically need to get to work. I do not recommend using any of the comparison quote sites out there as they generally are lead generation based services that collect and sell your information. You’re better off spending an evening on the phone with all of the big-name insurers. Here’s what you can do:

1. Settle on exactly how much insurance you need. You need exact dollar amounts to get a fair comparison.
2. Call all of the major companies and probe for all eligible discounts. Have them tell you and then email or fax their quote.
3. Compare offers and save.

Auto Insurance Discussion

What kind of discounts have you been able to receive on your auto insurance? Also, if you know of an auto insurance comparison site that doesn’t collect any personal data and takes a look at a wide variety of discounts, I’d like to hear about it. Please add a comment to this post.

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How to Save on Auto Insurance is copyrighted by 20somethingfinance.com without consent to republish.