The Cheapest New Cars of 2016




Each year, I enjoy researching and publishing a ranking of the cheapest new cars sold in the United States. This post ranks the top 10 cheapest new cars of 2016.

You may also want to check out last year’s cheapest new cars for comparison. With dealers wanting to get rid of last year’s inventory and shift focus to 2016 models, there is potential to find a great deal on previous model years (and in many cases, they are the exact same car).

I have made efforts to limit my vehicle use, but am still somewhat dependent on a vehicle and I know many others here are too. As a vehicle consumer, I think it is interesting to see what’s trending in the automotive market and what cost and fuel-efficiencies have been gained. There is value in knowing what to look for now (in limited circumstances) or down the road.

That said, it’s worth noting that this list of the cheapest new cars is not an endorsement to all to go out and buy a new car. When it comes to optimizing your finances, vehicle ownership has a few rules that I think should be applied:

  1. Try your best to live without a car. If you can, opt for public transportation, biking, walking, and carpooling.
  2. If you have a 2-car household, try to downsize from 2 cars to 1. I shifted from 2 cars to 1 six years ago and it has saved a ton of money.
  3. Drive your car into the ground by properly maintaining it, until the cost of maintenance absolutely outweighs the benefit of holding on to it. New cars these days easily can go 15+ years.
  4. If you do need a car, research and negotiate to get a great deal. I don’t believe in the “always buy used” motto. With proper incentives, new cars may actually be a cheaper option, particularly with the used car market being over-priced. Do your homework to find the most economical option for you.

cheapest new cars 2016When looking for the cheapest new cars, there is a whole lot more to finding the the most affordable car than just looking at sticker price. For your convenience, I’ve included:

  • the base auto transmission model. Some of these vehicles don’t have a manual transmission option. And if they do, they can be hard to find and sell. If you can find and drive a manual, it could save you roughly $800 – $1,200.
  • MSRP (you should not pay this much if you use an effective new car negotiation strategy)
  • factory invoice price

Also, price out vehicles at TrueCar.com and KBB.com to see not only what the MSRP and factory invoices are, but what actual buyers are paying in your market.

I’ve also included other variables that impact total cost:

  • city and highway MPG fuel efficiency
  • average annual fuel cost (from the EPA’s fueleconomy.gov at $2.04 per gallon of regular unleaded, 15,000 miles driven (45% city, 55% highway)
  • length of basic and powertrain warranties

Finally, I highly recommend pricing out insurance premiums at a number of automotive insurers prior to choosing which car to purchase.




The Cheapest New Cars of 2016

Last, year, I had claimed that it was the most disappointing year for cheap new cars in the market since I started doing the list 6 years ago. Well, scratch that – 2016 was even more disappointing!

For starters, 2 vehicles that made last year’s list were dropped from their manufacturer’s lineups. Scion iQ, last year’s 7th cheapest new car model, was dropped from Scion’s lineup. The 9th cheapest, Mazda 2, was dropped from the U.S. market. Neither vehicle apparently sold enough units in the U.S. to justify continuation in the market.

Additionally, only 2 new subcompact or compact cars – the Scion iA and iM – hit the market, out of 46 new or redesigned 2016 model vehicles. Neither model was able to crack the top 10 list of cheapest new cars. On the bright side, there were two redesigned models (Smart ForTwo Pure and the Chevy Spark).

Unfortunately, I think what you’re seeing is a movement away from small, compact vehicles with gasoline prices dropping to $2 per gallon, with no sustained increase in price in sight. Manufacturers are moving away from small, fuel-efficient vehicles because of their low profit margins and consumer purchasing behavior. I’ll be exploring this further in my upcoming ranking of the most fuel-efficient cars of 2016.

With the Scion iQ and Mazda 2 exiting the market, the Honda Fit and Hyundai Accent jump back into this year’s list of the cheapest new cars. Meanwhile, the Nissan Versa retakes the #1 spot from the Smart ForTwo Pure, which drops to #4 with its notable price increase from the redesign.

For my money, the Nissan Versa, Chevy Spark (#1 – #3 on this list) are all winners. They offer the most value with their sizes, top in class fuel efficiency, and lowest prices.

Here are the top 10 cheapest new cars of 2016, in order. Which would you pick, if you were in the market for a new car?

10. Honda Fit

  • 2016 Honda FitBase Automatic Transmission model: Honda Fit LX CVT, 4-Door Hatchback
  • MSRP: $17,425
  • Factory Invoice Price: $16,987
  • Engine Specs:1.5L, Continuously Variable Auto Transmission (CVT), 16-valve, 4 cylinder, 130 HP
  • City MPG: 33
  • Highway MPG: 41
  • Annual Fuel Cost: $850
  • Powertrain Warranty: 5 years, 60,000 miles
  • Limited Basic Warranty: 3 years, 36,000 miles
  • Overview: The Honda Fit jumps back into the list. The Fit saw a redesign last year, which brought a new CVT transmission and outstanding fuel efficiency (33 mpg city, 41 mpg hwy). It’s not the cheapest vehicle on the list, but it is one of the largest and a strong value.

9. Hyundai Accent

  • 2016 Hyundai AccentBase Automatic Transmission model: Hyundai Accent SE, 4-Door Sedan
  • MSRP: $16,580
  • Factory Invoice Price: $16,299
  • Engine Specs: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 137 HP
  • City MPG: 26
  • Highway MPG: 37
  • Annual Fuel Cost: $1,000
  • Powertrain Warranty: 10 years, 100,000 miles
  • Limited Basic Warranty: 5 years, 60,000 miles
  • Overview: Formerly the “Accent GLS”, this car now has a much more appropriate name with “Accent SE”, but there are no changes to the vehicle itself.

8. Chevy Sonic

  • 2016 Chevy SonicBase Automatic Transmission model: Chevy Sonic LS, 4-Door Sedan
  • MSRP: $16,470
  • Factory Invoice Price: $16,392
  • Engine Specs: 1.8L, 6-speed Auto, 16-valve, 4 cylinder, 138 HP
  • City MPG: 24
  • Highway MPG: 35
  • Annual Fuel Cost: $1,100
  • Powertrain Warranty: 5 years, 100,000 miles
  • Limited Basic Warranty: 3 years, 36,000 miles
  • Overview: There is a 1.4L turbo Sonic available, but still in limited production and it is more expensive. I’ve found this to be a big mistake by GM. The 1.8L is inefficient (least efficient car on this list) and is even less efficient than the much larger Malibu. Still, this is one of the top selling compact cars on the market.

7. Toyota Yaris

  • 2016 Toyota YarisBase Automatic Transmission model: Toyota Yaris L, 3-Door (Liftback/Hatchback)
  • MSRP: $16,445
  • Factory Invoice Price: $16,121
  • Engine Specs: 1.5L, 4-Speed Auto Transmission, 16-valve, 4 cylinder, 106 HP
  • City MPG: 30
  • Highway MPG: 36
  • Annual Fuel Cost: $950
  • Powertrain Warranty: 5 years, 60,000 miles
  • Limited Basic Warranty: 3 years, 36,000 miles
  • Overview: Yaris… it’s a car. It’s also in need of an update.

6. Kia Rio

  • 2016 Kia RioBase Automatic Transmission model: Kia Rio LX, 4-Door Sedan
  • MSRP: $16,220
  • Factory Invoice Price: $15,903
  • Engine Specs: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 138 HP
  • City MPG: 27
  • Highway MPG: 37
  • Annual Fuel Cost: $1,000
  • Powertrain Warranty: 10 years, 100,000 miles
  • Limited Basic Warranty: 5 years, 60,000 miles
  • Overview: The hatchback version of this car actually looks pretty sleek. Gotta love the warranty on Kia/Hyundai cars too.

5. Ford Fiesta

  • 2016 Ford FiestaBase Automatic Transmission model: Ford Fiesta S Sedan, 4-Door
  • MSRP: $16,060
  • Factory Invoice Price: $15,746
  • Engine Specs: 1.6L, 6-speed Auto Transmission, 16-valve, 4 cylinder, 120 HP
  • City MPG: 27
  • Highway MPG: 37
  • Annual Fuel Cost: $1,000
  • Powertrain Warranty: 5 years, 60,000 miles
  • Limited Basic Warranty: 3 years, 36,000 miles
  • Overview: The Fiesta is still hanging around in the top 5 and is one of the best selling compact cars in the U.S.

4. Smart ForTwo Pure Coupe

  • 2016 Smart ForTwo Pure CoupeBase Automatic Transmission model: Smart ForTwo Pure Coupe
  • MSRP: $15,400
  • Factory Invoice Price: $14,455
  • Engine Specs: 0.9L, 6-speed Auto Transmission, Turbo, 12-valve, 3 cylinder, 89 HP
  • City MPG: 34
  • Highway MPG: 39
  • Annual Fuel Cost: $1,050
  • Powertrain Warranty: 4 years, 50,000 miles
  • Limited Basic Warranty: 4 years, 50,000 miles
  • Overview: The Smart ForTwo loses last year’s #1 ranking for cheapest new car, as its redesign resulted in it jumping up in price by $1,380 over the previous MSRP of $14,020. Its engine moves from a 5-speed to 6-speed trans with more horsepower (up to 89 from 70), giving it a 1 MPG increase in highway MPG. As I’ve always said about this car – I love the efficiency and price, but compared to other cheap cars, I don’t see the value with the tiny size.

3. Mitsubishi Mirage

  • 2016 Mitsubishi MirageBase Automatic Transmission model: Mitsubishi Mirage DE CVT, 4-Door Hatchback
  • MSRP: $14,905
  • Factory Invoice Price: $14,598
  • Engine Specs: 1.2L, Continuously Variable Auto Transmission (CVT), 74 HP
  • City MPG: 37
  • Highway MPG: 44
  • Annual Fuel Cost: $750
  • Powertrain Warranty: 10 years or 100,000 miles for original owners, 5 years/60,000 for subsequent owners
  • Limited Basic Warranty: 5 years or 60,000 miles
  • Overview: Oddly, Mitsubishi is skipping a 2016 model year Mirage, however, it plans to have a redesigned 2017 model. Last year’s model can still be snatched up with the price and specs highlighted here. The Mirage presents an excellent value with its price and fuel efficiency.

2. Chevy Spark

  • 2016 Chevy SparkBase Automatic Transmission model: Chevy Spark LS, 4-Door Hatchback
  • MSRP: $14,635
  • Factory Invoice Price: $14,127
  • Engine Specs: 1.4L, Continuously Variable Auto Transmission (CVT), 98 Horsepower
  • City MPG: 31
  • Highway MPG: 41
  • Annual Fuel Cost: $850
  • Powertrain Warranty: 5 years or 100,000 miles
  • Limited Basic Warranty: 3 years or 36,000 miles
  • Overview: The 2016 Spark is newly designed, is less boxy, and has moved to a CVT transmission, with slightly more horsepower and efficiency. Last year, I sat in a Spark and found the front seats to be surprisingly spacious. There are rear seats, however, any non child or canine would be particularly uncomfortable sitting back there with the limited legroom. The hatchback feature is a big plus though.

1. Nissan Versa

  • 2016 Nissan VersaBase Automatic Transmission model: Nissan Versa Sedan 1.6S, 4 Door
  • MSRP: $14,325
  • Factory Invoice Price: $14,127
  • Engine Specs: 1.6L, 4-speed Auto Transmission, 16-valve, 4 cylinder, 109 HP
  • City MPG: 26
  • Highway MPG: 35
  • Annual Fuel Cost: $1,000
  • Powertrain Warranty: 5 years or 60,000 miles
  • Limited Basic Warranty: 3 years or 36,000 miles
  • Overview: The Nissan Versa retakes the #1 spot as the cheapest new car of 2016, mostly due to a price increase of only $10 over last year and a big price bump with the redesigned Smart ForTwo Pure Coupe. It is really hard to beat the value of this affordable model.

9 Comments

  1. Lydia
      • Mark
  2. Brad
    • Mark
  3. Nopenopenope
  4. Andrew
  5. Daniel Christner

Leave a Reply

Join 10,000+ wealth builders. Get posts emailed to you, for free.