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Why sub-$30,000, entry-level auto offerings are shrinking
Posted by Talbot Payne on November 3, 2025
Phoenix — The average price of a new car crested $50,000 this fall, continuing an industry trend toward higher vehicle prices. Industry analysts point to a variety of factors, including consumer taste for higher-priced SUVs and trucks, government regulations, and an influx of electrified vehicles.
Another contributor is the demise of the entry-level, sub-$20,000, subcompact car segment.
In 2019, eight cars were priced at $20,000 or less (inflation-adjusted for 2025). Fast forward to 2025 and only one of these cars still exists, the $18,585 Nissan Versa, while no new models have joined the segment. Versa peers have all exited the market: Toyota Yaris, Chevrolet Sonic, Kia Rio, Hyundai Accent, Ford Fiesta, Chevrolet Spark and Mitsubishi Mirage.
New for 2026, the $23K Nissan Sentra maintains its affordable price, while upgrading interior and exterior design. Henry Payne, The Detroit News
Indeed, only Nissan still offers vehicles in the subcompact and compact car segments: the subcompact Versa and compact Sentra. Entry-level subcompact SUVs have also exited the market, including the Ford EcoSport and Kia Soul, and new tariffs threaten to squeeze lower-priced, Mexican-made models.
The ninth-generation Sentra takes a big design leap for the 2026 model year with a sleek exterior and premium interior, including a 25-inch hoodless, dash screen housing twin digital displays that is a match for a BMW.
“It’s important that we keep these entry points to our brand,” said Mark Zoba, product planning manager for the Sentra, in Phoenix at the car’s first media test. “We want to bring in young buyers when they shop for their first car. As they go through their life, we find that they will continue to buy another Nissan. As it comes to Sentra, 40% of buyers will come back and buy another Nissan.”
Despite the technology leap, Nissan expects the car to sell for virtually the same price as the current, eighth-generation sedan that starts just below $23,000. Its competition comes from Asian and European automakers as Ford (Focus), Chevrolet (Cruze) and Dodge (Dart) dropped out of the market in recent years.
“Our focus was to appeal to a buyer with a high-tech image. Having dual 12.3-inch displays really adds to that,” Zoba said. “Our target buyer is connected to their phone, so our tech makes it easier to bring that into our vehicles.”
Even price-conscious Nissan partner Mitsubishi — an entry-level mainstay with its subcompact Mirage and compact Lancer cars — has exited those segments. Today, it only makes one vehicle, the $29,700 Eclipse Cross SUV, for under $30K. This month, it previewed two SUVs for 2026: a premium, off-road version of its compact $32,205 Outlander SUV and an electric SUV based on the Nissan Leaf.
The Mitsubishi Mirage was the most affordable new car in the U.S. market until it ceased production after the 2024 model year. Henry Payne, The Detroit News
“Customer tastes have changed. They want SUVs,” Mitsubishi spokesperson Jeremy Barnes said. “We definitely have seen transaction price moving up. We’ve seen a higher-educated, higher credit-rated demographic with the Outlander. We have to fish where the fish are.”
Nissan’s Sentra is a top contender for the North American Car, Truck and Utility of the Year Awards’ car category. Of the 30 nominees across three categories (average price $52,000), the Nissan is one of only two vehicles (the other is the compact Kia K4 Hatchback) listed under $30K.
Sentra is one of five vehicles that Nissan offers under $30,000 (including destination fee): the $18,585 Versa, $23,325 Kicks subcompact SUV, $23,780 Sentra (eighth-gen, 2025 model), $28,195 Altima midsize sedan, and compact Rogue SUV at $29,980.
By contrast, Ford — which offered four vehicles under $30,000 (in 2025 dollars) in 2019 — sells just one for 2025: the $29,840 Maverick compact pickup truck. Stellantis’s mainstream brand, Jeep, lists one vehicle under $30K — the $28,895 compact Compass SUV. General Motors offers four sub-$30K models: the subcompact, $21K Chevy Trax SUV, subcompact, $25,195 Buick Envista SUV, midsize, $26,995 Malibu sedan, and $29,995, compact Equinox SUV — with the Malibu exiting the market after this model year.
As U.S. competitors have dropped out, Asian brands like Nissan have benefited.
The Maverick pickup is Ford’s lone model with a starting price below $30,000. Henry Payne, The Detroit News
“We’ve definitely gained customers looking for affordable sedans,” said Joe Ventimiglia, general manager for LaFontaine Nissan/Infiniti of Troy. “We have a number of vehicles under $30,000, and we’ve found a nice little niche.”
Echoing Zoba, he said most buyers are young, price-conscious, first-time buyers. “If we sell them a new Sentra, Kicks or Rogue, our experience is they will stay in the brand,” said Ventimiglia, who just returned from a Las Vegas dealer meeting where he said the new Sentra was met with excitement. “The Sentra is front-wheel-drive, so shoppers will move up to the Kicks or Rogue if they want all-wheel-drive in this climate.”
He said his dealership moves fewer Versas (42,590 in national 2024 sales) versus the Sentra (152,752 sales in 2024) in part because Nissan makes financing/lease terms attractive for buyers who choose the compact Sentra over its smaller sibling. A review of Nissan pricing in October, for example, shows Versa monthly finance payments for $323 over 84 months versus the Sentra’s $347-a-month.
“When your payments are just $30 more for a bigger Sentra, many customers find it a better value,” Ventimiglia said.
Auto analyst and Seeking Alpha investment columnist Anton Wahlman said there’s another factor: the steady increase in government regulations has shrunk the margins on small-car segments.
A fleet of Chevy Cruze hatchbacks in Midtown Detroit. The compact’s last model year was 2019, as GM has joined other carmakers in culling lower-priced vehicles from its lineup. Henry Payne, The Detroit News
“Government regulations have driven up the build cost and disproportionality increased the price of small cars,” Wahlman said. “All autos are required to have systems like airbags, rear-view cameras, automatic braking, catalytic converters, while emissions regulations have forced more expensive turbochargers and hybrid powerplants.”
The result is that subcompact prices have been pushed closer to their compact brethren, making them a less attractive value-buy.
“Added, mandatory costs have compressed the price difference between subcompact and compact model lines,” Wahlman said.
He said if the Trump EPA is successful in repealing the Obama-era, 2009 Greenhouse Gas Endangerment finding, then there could be a resurgence in smaller vehicles with simpler, less costly powertrains. On the other hand, Wahlman said, the Trump administration’s 25% tariff on Mexican imports has disproportionately hit smaller cars that are made south of the border with cheaper labor to increase tight margins.
The affordable subcompact Ford Fiesta (left) and Mitsubishi Mirage have left the market. Henry Payne, The Detroit News
Both the Nissan Sentra and Versa are made in Mexico, and face tariff costs that would make them less price-competitive. Nissan could move production to one of its two U.S. assembly plants, but retooling would be costly. Competitor Honda manufactures its Civic Hatchback, a popular trim of its best-selling U.S. compact, in Indiana.
“(Tariffs) are a new aspect, and they are constantly changing as well,” said Sentra product chief Zoba. “Right now, it’s important to us to hold the price point for new, young buyers.”
Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or @HenryEPayne.