5 Most Affordable Cars for First-Time Buyers

Buying your first car is an exciting milestone, but as with any large purchase, many factors must be considered before sealing the deal. For first-time buyers, finding a reliable and safe vehicle that meets your needs and fits your budget is essential. Beyond the purchase price, there are other considerations, like fuel economy, maintenance, insurance costs and whether to buy a new or used vehicle. There's a lot to think about!

In this article, we'll explore the top five most affordable cars for first-time buyers and the key factors to consider to help you make a sound purchase decision.

1. Toyota Yaris

The Toyota Yaris is a compact, maneuverable sedan that's ideal for the rigors of city driving. 2017-2020 models have advanced safety features such as forward collision warning and low-speed automatic emergency braking for added confidence.

Fuel economy is impressive in 2017-2020 Yaris models, with the standard 1.5L four-cylinder engine and automatic transmission achieving an EPA-estimated 40 mpg on the highway.

Inside, the cabin is simply designed, but you'll find Apple CarPlay^® and Android Auto^™ smartphone integration, Bluetooth^® connectivity, two USB ports and a six-speaker sound system as standard (2020 models). While cargo space is limited, the Yaris makes up for it with its nimble handling and on-road performance.

Pros	Cons
Appealing standard features Impressive fuel economy Nimble handling	Sluggish acceleration No-frills interior Limited cargo space

Current price range by model year:

$15,000-$17,000 (2020)
$13,000-$14,000 (2019)
$14,000-$16,000 (2018)

2. Honda Fit

With the Honda Fit, good things do come in a small package. This hatchback is renowned for its versatile cabin, with a rear Magic Seat^® feature that flips up to carry tall items or folds down to accommodate bulky or oversized items (like a bicycle) to maximize interior space. The 2015-2020 Fit is fuel-efficient, too, returning an EPA-estimated 40 mpg on the highway when equipped with the standard 1.5L four-cylinder engine.

While you'll have to climb trim levels to get a larger touchscreen display and Apple CarPlay and Android Auto connectivity (2018-2020 models), the Honda Fit does promise spritely acceleration, making it a pleasing daily driver for commuting or cruising around town.

Pros	Cons
Versatile interior Spacious cabin Excellent fuel economy figures	Tight rear-seat headroom Lackluster braking performance Limited base-level tech

Current price range by model year:

$15,500-$20,500 (2020)
$12,800-$17,600 (2019)
$12,900-$16,850 (2018)

3. Kia Rio

The Kia Rio is another fun-to-drive subcompact with affordability in mind, available in sedan and hatchback body styles. The 1.6L four-cylinder engine and automatic transmission ensure fuel-sipping performance, with an EPA-estimated 41 mpg on the highway (2020-2023 models) to help you go longer between fill-ups.

With a standard rearview camera in 2018-2023 models, you'll feel confident doing reverse maneuvers in crowded parking lots or on city streets. While the tilt-adjustable steering wheel lacks telescoping adjustments, the driver's seat includes height adjustments for comfort.

For the latest tech, look for 2020 and newer Rio models, which come standard with Apple CarPlay and Android Auto connectivity and a seven- or eight-inch touchscreen for the best value.

Pros	Cons
Generous warranty coverage High gas mileage Easy to drive	Limited sedan cargo space Underpowered powertrain No telescoping steering wheel

Current price range by model year:

$17,100-$17,550 (2023)
$14,900-$15,600 (2022)
$13,800-$14,450 (2021)

4. Hyundai Accent

A staple in the subcompact class, the Hyundai Accent is a stylish sedan that combines affordability with excellent gas mileage. With the 1.6L four-cylinder engine and automatic transmission, the 2020-2022 Accent returns an EPA-estimated 41 mpg on the highway—ideal for road trips or commuting. This sedan also delivers nimble performance that's agile and stable around curves. You may find the seats unsupportive on longer drives, but the 2018-2022 Accent does include standard cruise control for extra convenience. The roomy interior also features a 60/40 split-folding rear seat, upping the sedan's utility and cargo-carrying abilities.

Pros	Cons
Excellent fuel economy Spacious interior Strong warranty coverage	Limited base-level tech Uncomfortable seats Uninspiring acceleration

Current price range by model year:

$16,200-$17,600 (2022)
$15,800-$17,300 (2021)
$13,200-$16,900 (2020)

5. Nissan Versa

If you prioritize interior space and safety features, the Nissan Versa is an affordable sedan for first-time buyers. 2020-2024 models come standard with forward collision warning, automatic emergency braking, lane departure warning and automatic high beams. With the 1.6L four-cylinder engine and automatic transmission, the 2020-2024 Versa is a fuel-sipping option, getting an EPA-estimated 40 mpg on the highway.

While this sedan lacks storage for small items in the cabin, the Nissan Versa includes a fold-down rear seat, expanding cargo capacity for larger items. The sedan also features a low-load floor for added convenience.

Pros	Cons
Generous fuel economy Impressive safety tech Good cargo space	Limited small-item storage Slow acceleration Numb steering

Current price range by model year:

$17,400-$21,300 (2024)
$16,600-$20,250 (2023)
$14,300-$17,400 (2022)

Factors To Consider When Choosing a Car

Budget

Before visiting a dealership or taking a car for a test drive, consider your budget and how much you can afford. If you're financing or leasing the vehicle, calculate a comfortable monthly payment based on your income and other financial obligations. A general rule is to spend no more than 10% of your take-home pay on a car payment. For example, if your after-tax income is $4,000 monthly, aim for a monthly car or lease payment of no more than $400.

Another important consideration is the amount you have saved for a down payment, which can lower your monthly costs and reduce the total interest paid over the life of the loan. If you've diligently saved, consider purchasing your first car outright. Paying in full eliminates the need for monthly payments and interest charges, making it the most financially beneficial option.

Fuel efficiency

When shopping for your first vehicle, paying attention to fuel economy is crucial, especially if you have a tight budget and log many miles. A more fuel-efficient car means fewer trips to the pump, which helps keep your monthly fuel expenses in check. Many options are available today, including fuel-sipping gasoline and diesel models, hybrids and electric vehicles.

Sedans generally offer better gas mileage than larger vehicles like trucks and SUVs, making them a smart choice for first-time buyers looking to save on fuel costs. When budgeting for your first car, consider how much you expect to spend on fuel each month. Remember that the more efficient the vehicle, the less you'll spend on gas. Fueleconomy.gov is a trusted government resource to help you make an informed choice when purchasing your first vehicle with efficiency in mind.

Maintenance costs

Maintenance and repair costs can vary significantly from model to model, especially considering a vehicle's age and condition. Research a potential car before buying it to ensure you can afford its upkeep.

According to AAA, the cost of keeping a vehicle in optimal shape, including factory-recommended maintenance and the average price of an extended warranty, is approximately $1,425 annually or $119 a month. Typical maintenance tasks include oil changes and tire rotations, but other repairs or preventive maintenance may also arise.

Resources like RepairPal provide auto repair and maintenance estimates, helping you budget more accurately for these expenses. By choosing a reliable vehicle and staying on top of regular maintenance, you can minimize unexpected repair costs and help ensure your car remains in good condition.

Insurance costs

When buying your first vehicle, consider the insurance costs. Factors influencing premiums include the car's make and model, safety features, driving history, age and location.

To get the best insurance rates, compare quotes from multiple providers and look for vehicles with advanced safety features, which may lead to discounts. Maintaining a clean driving record will also help you save money each month. Consider higher deductibles to lower your monthly premiums, but ensure you have enough savings to cover the deductible if needed.

Safety ratings

Regardless of your age or stage of life, having a safe and reliable vehicle is a must. Cars with high safety ratings often come standard with key driver assistance and safety features that help mitigate accidents, lower insurance rates and avoid costly collision repairs.

When shopping around, check safety ratings using reliable sources, such as the Insurance Institute for Highway Safety (IIHS) and the National Highway Traffic Safety Administration (NHTSA). These organizations provide crash test reports and other valuable information regarding the safety scores and advanced features for specific makes and models, helping you make an informed choice.

Resale value

Consider the resale value, as you may want to sell or trade the vehicle. Depreciation starts when you drive your ride off the lot, with new models typically depreciating faster than pre-owned ones. Additionally, some automotive makes and models hold their value better over time.

To maximize resale value, choose a brand known for its reliability and strong warranty, and focus on models in high demand within the used car market. Keeping your mileage low will also contribute to a higher resale value. Finally, maintaining your vehicle according to the manufacturer's recommendations and keeping detailed service records can further enhance its resale appeal.

Enhance Your Ownership Experience

Choosing the right vehicle for your first purchase extends beyond the sticker price. It's about doing your research to find a model that balances affordability with fuel economy, maintenance costs and insurance costs, but also meets your need for a reliable, safe and comfortable ride. The Synchrony Car Care credit card can help you pay for car repairs promptly, keeping you on the road and where you need to be. Learn more and apply now.