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Best new cars under $20,000

Why pay more than you need to for a new car?

Looking for a new car under $20,000? At this price point, your choice of cars is somewhat limited with fewer than 10 cars available according to our list. 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.

ManufacturerModelClick price for repaymentsFind a deal
KiaPicanto S Manual, S Automatic and GT-Line ManualFrom $16,290
Price from Kia
on OnlineAuto's website
MGMG3 Core, Core with Nav and ExciteFrom $17,990
Driveaway price from MG
on OnlineAuto's website
MitsubishiMirage Manual or AutomaticFrom $17,490
Price from Carsales
on OnlineAuto's website
SuzukiBaleno GLFrom $19,490
Price from Suzuki website
on OnlineAuto's website

Features to look for in new cars under $20,000

  • 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not receive the highest possible ANCAP rating, some have no crash ratings and others have scores that are several years out of date.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.

10 tips to save money when you buy a car

  • Buy a demo or nearly new car. Buying a dealer demo model car (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 because 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 and 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?

Mitsubishi Mirage: Cars under $20,000

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.

Loans for cars under $20,000

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.

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Name Interest Rate (p.a.) Comp. Rate (p.a.) Application Fee Monthly Fee Monthly Repayment
OurMoneyMarket New Car Loan
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
Verified Lending Used Car Loan
Fixed1 - 7 Years $10,000 - $200,000
Interest Rate (p.a.)
7.1%
to 18.99%
Comp. Rate (p.a.)
8.06%
to 22.99%
Application Fee
$395
Monthly Fee
$0
Monthly Repayment
$630.67
Go to siteMore Info
NRMA New Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
7.29%
to 16.99%
Comp. Rate (p.a.)
8%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$635.67
Go to siteMore Info
Note: Take out a loan for an eligible electric vehicle and receive a 1.5% discount on your personalised interest rate (interest rates start from 5.79% p.a. and comparison rates from 6.49% p.a.)
RACV New Car Loans
Fixed1 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
7.29%
to 16.99%
Comp. Rate (p.a.)
8%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$635.67
Go to siteMore Info
You'll receive a fixed rate from 7.29% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
loans.com.au - New - Variable Rate Special
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
6.24%
to 7.74%
Comp. Rate (p.a.)
7.36%
to 8.85%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$630.83
Go to siteMore Info
OurMoneyMarket Used Car Loan - No Vehicle Age Limit
Fixed1 - 7 Years $2,001 - $75,000
Interest Rate (p.a.)
6.57%
to 18.99%
Comp. Rate (p.a.)
7.19%
to 21.78%
Application Fee
$250
min.
Monthly Fee
$0
Monthly Repayment
$622.82
Go to siteMore Info
NRMA Used Car Loan
Fixed1 - 7 Years $5,000 - $130,000
Interest Rate (p.a.)
8.49%
to 16.99%
Comp. Rate (p.a.)
9.21%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$647.01
Go to siteMore Info
You'll receive a fixed rate from 8.49% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
loans.com.au - Variable Rate Used Car < 5 years
Variable3 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
7.74%
to 7.74%
Comp. Rate (p.a.)
8.85%
to 8.99%
Application Fee
$400
Monthly Fee
$8
Monthly Repayment
$644.82
Go to siteMore Info
RACV Used Car Loans
Fixed1 - 7 Years $5,000 - $150,000
Interest Rate (p.a.)
8.49%
to 16.99%
Comp. Rate (p.a.)
9.21%
to 17.77%
Application Fee
$499
Monthly Fee
$0
Monthly Repayment
$647.01
Go to siteMore Info
You'll receive a fixed rate from 8.49% p.a.
Benefit from no ongoing fees, 5-hour approval and a 21-day satisfaction guarantee. Interest rate discounts for members.
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Showing 9 of 9 results

Compare car insurance side by side and get quotes

Name Product Roadside assistance Accidental damage Storm Choice of repairer Agreed or Market Value
Budget Direct Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: The 2024 winner of our Best Value Car Insurance award. It's cheaper than most, plus you can lower costs by adding age restrictions.

⭐ Current offer: 15% off your first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: Anyone who wants a good value policy.
Youi Comprehensive
Optional
Agreed or Market
Finder's summary: The 2023 winner of our Best Features Car Insurance award. Plus, it's one of the only insurers to automatically include roadside assistance.

Who it might be good for: Those who want good customer service with lots of inclusions.
Australia Post Comprehensive
Optional
Agreed or Market
Finder's summary: Covers a little more than other insurers. You don’t need to pay an excess for windscreen repairs and cover applies to anyone who uses your car.

⭐ Current offer: Get $100 off your first year's comprehensive car insurance premium when you buy online. T&Cs apply.

Who it might be good for: Multiple people using one car.
ROLLiN' Comprehensive
Agreed
Finder's summary: One of the most cost-effective insurers for under 25s, according to Finder research, with no aged-based excess.

Who it might be good for: Young drivers looking to keep costs down and anyone who’d like to get more flexibility from their car insurance.
Bingle Comprehensive
Market
Finder's summary: Our data shows it’s the cheapest comprehensive policy. It just covers the basics such as damage to your car, theft and storms – it doesn’t go in for add-ons and extras.

Who it might be good for: Those wanting a low-cost, no-frills policy.
QBE Comprehensive
Green Company
QBE Comprehensive
Optional
Agreed or Market
Finder's summary: Our best-rated Car Insurer for Customer Satisfaction in 2021/2022 and Green Insurer for the last 3 years.

⭐ Current offer: Save $75 when you purchase a new comprehensive policy online. T&Cs apply.

Who it might be good for: Those who want a trustworthy insurer and more cover than other brands, such as 3-year new car replacement (e.g. they'll give you money for a new car for up to 3 years if yours is written off).
Kogan Comprehensive
Optional
Agreed or Market
Finder's summary: Kogan comes with all the perks that most comprehensive car insurance policies include, but you'll also be entitled to some benefits from its online store. This usually comes in the form of a gift voucher or discount if you buy online.

⭐ Current offer: Get $80 off first year premiums when you purchase Kogan Comprehensive Car Insurance online + $10 monthly kogan.com credit. T&Cs apply.

Who it might be good for: Kogan shoppers and those after a good range of policy options.
Qantas Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: You need car insurance so why not get one that lets you earn Qantas Points? It's good value too (it's underwritten by the same insurer as Budget Direct).

⭐ Current offer: Earn up to 30,000 Qantas Points with every Qantas Car Insurance policy you take out by 28 May. T&Cs apply.

Who it might be good for: People who want more bang for their buck with Qantas Points.
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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.

https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-492-a-market-that-is-failing-consumers-the-sale-of-add-on-insurance-through-car-dealers/
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