Best new cars under $20,000
Why pay more than you need to for a new car?
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Looking for a new car under $20,000? This guide will help you learn what cars are available for $20,000 or less, driveaway.
Which are the best new cars under $20,000?
At this price point, your choice of cars is somewhat limited. In fact, in 2021, there are 10 fewer options than when we last updated this list – with only 4 new car models in Australia costing under $20,000. Almost all of them are light, micro cars, though there is a small car in the form of the Suzuki Baleno.
Check below to see how you could stretch your budget further. You can either click the price to see your repayments or find a deal.
| Manufacturer | Model | Click price for repayments | Find a deal |
|---|---|---|---|
| Kia | Picanto S Manual, S Automatic and GT-Line Manual | From $17,990 Price from Kia | Find a deal on OnlineAuto's website |
| MG | MG3 Core, Core with Nav and Excite | From $17,990 Driveaway price from MG | Find a deal on OnlineAuto's website |
| Mitsubishi | Mirage Manual or Automatic | From $17,490 Price from Carsales | Find a deal on OnlineAuto's website |
| Suzuki | Baleno GL | From $19,490 Price from Suzuki website | Find a deal on OnlineAuto's website |
What features should I look for in a new car under $20,000?
When you're buying a car on a $20,000 budget it's still important to know which features you want from the outset. Here are some items to look out for when you head to the dealership:
- A 5-star ANCAP rating. Make sure the vehicle you're purchasing is rated highly by Australia's vehicle safety rating agency, ANCAP. Find out more about these ratings here. Some of the models in the above list did not receive the highest possible ANCAP rating, some have no crash ratings and others have scores that are several years out of date.
- Parking sensors or a reverse camera. A lot of new vehicles come with either reverse parking sensors or a camera (or even both) installed. These features help you spot unseen obstacles and back into spaces you might otherwise have been unable to park in. They are most useful in tight, multi-storey car parks.
- Bluetooth, Apple CarPlay and Android Auto. If a car has Bluetooth phone connectivity, this will make your journeys pass quicker and reduce the hassle of getting where you want to go. Apple CarPlay and Android Auto are particularly useful, as they extend your smartphone's UI onto the car's infotainment system, allowing you to use apps like Spotify and Google Maps natively. As a bonus, if you have a compatible phone, you don't need to go for a trim that has sat nav built in by default.
- Satellite navigation. GPS is a nice feature, but if you have Apple CarPlay or Android Auto, you don't especially need it. Live traffic is a useful thing to have – Google Maps and Apple Maps possess this feature, while some satellite navigation systems come with a limited-time subscription for it.
- AUX/USB input. It's such a small component that probably costs car makers a few cents to install, but it'll transform a budget-spec model. With one of these fitted, you can hook your phone up to the car using an auxiliary cable or USB plug and play your music or navigation instructions through the sound system.
- Warranty Part of a new car's attraction is getting a long warranty to cover you for premature mechanical failures and faults. The longer the warranty, the more peace of mind you have. Some of the sub-$20,000 cars on our list have 5 years unlimited-kilometre factory warranties. Others have 7 years unlimited-kilometre warranties, while one is on offer with a 10-year warranty!
- Excellent reviews. Don't buy a car based solely on its purchase price. Make sure you check out as many car reviews of that specific model as you can. Furthermore, take time to read the experiences of verified owners who have put tens of thousands of kilometres on their models. Also, you should visit Product Safety Australia to see if the car manufacturer has published any recalls for the vehicle you're interested in.
- Low maintenance & running costs. To avoid buying a cheap car then getting hit with high maintenance costs, check out the prices of servicing before you sign the contract. Most car brands will offer multi-year, capped-price servicing packages, which may work out cheaper in the long run. If you know a mechanic, ask them what parts prices and availability are like for the car you're researching. You can use websites like the Green Vehicle Guide to estimate annual fuel bills.
How can I save money buying a car?
Here's how to make your $20,000 budget stretch even further, perhaps even getting you into a higher-spec model.
- Buy a demo or nearly new car. Buying a dealer demo (a car the dealer used for test drives) or a model that's around a year (or two) old could save you quite a bit of cash. As a plus, you let someone else pay the bill for the first year's depreciation. With demo cars, in particular, dealers often spec these out to a decent standard, so you could get a higher trim for less money.
- Use a car buying service. Once you know which model you want, use a car buying service to help you access fleet-level, bulk-buy pricing. On average, these services can save their customers up to 10% of the purchase price.
- Shop around for offers. To find the best $20,000 car deal around, you're going to need to do some digging. Previously, we've found some great deals when we looked through the offers pages on car makers' websites. However, with chip shortages affecting supply, you'll have to trawl through the car sales sites and consider out of state dealers. They might be able to deliver the car, all for a reasonable price.
- Stick to the rule of 3. If you're buying in person, visit at least 3 dealerships before making your purchase. That way, you'll be able to play the dealerships' offers against each other and have leverage when negotiating. It helps to have found some similar cars you've found online too, so you can show the dealer what you're expecting and see if they will price match.
- Avoid unnecessary insurance add-ons. A 2016 report from the Australian Securities & Investments Commission (ASIC) found that many insurance plans sold by car dealers weren't valuable to consumers, so be careful what you sign up for. Types of insurance to question if they are offered include tyre insurance and loan protection insurance.
- Get the timing right. There are favourable and less favourable times to purchase a car. One is visiting a dealership at the end of the month when salespersons are trying to hit their targets. Another is that you should visit on a Monday or Tuesday when dealerships tend to be less busy and there's more time to negotiate. One well-known time to snap up a bargain is the end of financial year sales, as dealerships offer cut-price specials. A final tip around timing is to wait until a dealership is having a model runout sale when the current generation of a vehicle is about to be replaced by an updated version. Car dealers try to clear out the older stock to make way for the new build and may be more willing to strike a bargain.
- Come down a level. Higher trim grades, with all their cushy passenger comforts and extra tech, are tempting. But lower specification levels are cheaper. If you can live without things like leather upholstery and large alloy wheels, you could save thousands of dollars. That might just make a car that you thought was out of your $20,000 price range, easily affordable.
- Ditch the options. Another way dealers make money is by up-selling the optional extras. These quickly add up, inflating the purchase price of a car. One of the easiest sells for them is metallic paint, which usually costs around the $500 mark. If you're willing to go for one of the limited free paint colours (typically only 1 or 2 solid colours like White and Red), you could save money.
- Shop around for finance. By shopping around and comparing deals from multiple car loan lenders, you could save hundreds of dollars over a car finance agreement.
- Negotiate. Finally, negotiate with a dealer – doing so could save you money. At the least, you could get some nice freebies thrown in. Even if a dealer won't agree to a lower price, you could ask them to throw in metallic paint, floor mats or just a full tank of fuel, as a little cherry on top.
What are cheap cars like to drive and own?
It depends on the make and model. If you go for a sub-$20k Mitsubishi Mirage, for example, it's going to have a small 1.2-litre, 3-cylinder petrol engine, with 57kW. That means it's not going to be super speedy, but for around-town driving, it should prove pretty economical, using 4.7L/100km combined. With a base model ES, you'll get a 5-speed manual transmission and 14-inch steel wheels. Nothing ground-breaking there.
The spec is reasonable, considering the price:
- 7-inch color touchscreen, featuring DAB and a USB socket
- Apply CarPlay & Android Auto
- Bluetooth, with steering-wheel-mounted phone and sound controls
- Forward collision mitigation (FCM) – with pedestrian detection
- Central door locking and keyless entry
- Daytime running lights
- 6 airbags
- Rear view camera
Overall, not a bad spec, consider the Mirage is Australia's cheapest car. Even the top-spec Mirage LS costs less than $20,000. That model has things like cruise control, alloy wheels (15-inch), privacy glass, climate control air-conditioning, lane departure warning, front fog lamps and auto high beams – plus an automatic transmission.
Comparing the Mirage with the MG3, which is $500 more costly, is interesting. On the MG3, you get a 1.5-litre petrol engine, with a 4-speed automatic transmission. This car has a larger 8-inch infotainment touchscreen, 15-inch alloy wheels, plus a 4-speaker audio sound system with something called Yamaha 3D Soundfield. The seats are tartan-inspired fabric. MG offers 3 free paint options: yellow, white and black (the metallic paints in December 2021 were on offer too!). In summary, you get a bit more "bling" for your money. Fuel use is higher, at a claimed 6.7L/100km combined. The MG3 has a shorter, 7-year (instead of 10-year/200,000km) unlimited-kilometre warranty. A car journalist stated the MG3's engine was a bit soulless, without any life.
Additionally, the MG3 hasn't received an ANCAP crash rating, whereas the Mitsubishi Mirage has a 5-star rating (from ANCAP – rated in 2013).
In summary, at this price point, cars aren't going to be super luxurious and cushy, but they do have some surprising creature comforts.
Car loans you can use to purchase a vehicle under $20k
By entering your desired loan amount and term below, you will be able to see how much your monthly repayments on a car loan could be. But the savings don't have to stop here. You should also compare car insurance, whether you are looking for comprehensive car insurance, third party fire and theft or just CTP insurance, we have a number of comparisons and comrephensive guides that can help you make a decision.
Compare car insurance side by side and get quotes
Prices are for base models. Prices from manufacturers and accurate as at time of publishing.
Looking for a new car? Check out our time-saving comparison car reviews. If you already know the exact make, model and trim you want, you should compare car loans, as well as car insurance quotes to see how much you could save overall.
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