Low-Priced Cars Are Disappearing
by usnews.com
As gas prices rise, many of us are looking for inexpensive, small, fuel-efficient cars. Just a few years ago, we all knew, there were a number of reliable, fuel-thrifty small cars we could buy for under $15,000. Today, however, that number is shrinking rapidly.
Winding Road reports that, according to a J.D. Power and Associates study, “during this past spring (March 1 - May 11) there were only 10 models in the U.S. market with average transaction prices below $15,000. During the same period in 2006 there were 15 models stayed below the $15K mark.” Some automakers have pulled out of the sub-$15k segment entirely. Ford, Dodge, Pontiac and Scion all offered models in that price range just two years ago, but currently offer none.
Autoblog notes that, “While there may be a few more vehicles that have base prices below the $15,000 mark, J.D. Power’s numbers actually reflect transaction prices rather than MSRPs.” A handful of models are listed at prices below $15K, but actually cost consumers more than that on dealership lots because higher demand for the cars allows dealers to mark them up.
Chevrolet is now the only domestic automaker offering a car for under $15,000 — both the Aveo and Cobalt can be purchased in that range. The Aveo remains the lowest-priced new car in America. Kia also offers two, with its Rio and Spectra. Mazda’s B-Series is the only truck that costs under $15K.
Kicking Tires notes that some of the low-priced models are not selling particularly well despite their low cost. Most automakers aim to keep 60 days’ worth of inventory of any car available. If they have fewer than 60 days available, they generally believe they are not making cars fast enough to meet demand and are missing out on sales opportunities. More than 60 means they have made too many and may need to discount the cars to move them. Nissan, however, now has 90 days of inventory of its sub-$15k Versa subcompact. Suzuki has 91 days worth of similarly-priced Forenzas, and Chevrolet has 82 days worth of Aveo sedans.
So, if you’re interested in one of the handful of sub-$15K cars still available, this might be a good time to visit a dealership. In some cases, dealers still have more of the cheap cars than they want. But with fewer cars now for sale under $15,000 than at any other point in recent history, even these lower-priced cars may get more expensive soon. As we’ve reported recently, the cost of most of the materials used to make cars is increasing — so price jumps for cars themselves seem inevitable.
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