What’s the Best Car for the Money in 2021?
Getting the best car for the money isn’t as simple as buying a car with a low price tag. After all, the cheapest car on the market may not be very fuel efficient or may need more maintenance than a more expensive vehicle.
On the other hand, you might choose a car with an average price only to find out that you didn’t factor in taxes or insurance costs.
To find the best cars for the money, you’ll need to take all of these factors into account and weigh up the long-term value of the car — not just the manufacturer’s pricing.
Whether you want to find the best compact car or the best subcompact SUV, here’s how to choose the best car for the money, as well as our top picks for the best budget-friendly vehicles of 2021.
Lifetime Ownership Costs
One of the most important factors to consider when buying a new car is its lifetime maintenance and ownership costs. While these costs can vary widely from one automaker to the next, some brands have a reputation for making longer-lasting vehicles than others.
According to Consumer Reports, a 5-year-old vehicle needs an average of $205 worth of maintenance per year. After 10 years of ownership, that more than doubles to $430 per year.
Beyond that, it doesn’t make a whole lot of difference whether you drive a Ford or a Chevy: Your expenses will depend on how well you’ve taken care of the vehicle.
Many automakers offer a warranty on new vehicles, but these usually run out after several years and may not cover all types of repairs. Honda, for example, offers a three-year limited warranty and a five-year warranty on the powertrain, while Audi’s standard warranty lasts for four years.
Electric vs. Gas Cars
There is one easy way to reduce your maintenance costs, and that’s to consider buying an electric car or a hybrid. Both battery electric vehicles (BEVs) and hybrids (HEVs) all have lower lifetime maintenance costs than gas-powered cars.
That’s because electric vehicles use an electric motor and powertrain instead of an internal combustion engine, resulting in fewer trips to the mechanic and less frequent tune-ups.
In fact, a recent review found that buying an EV can save drivers up to $10,000 over the life of the vehicle, depending on the state you live in.
Additionally, all new EVs sold in the U.S. come with a warranty on the battery pack that’s standard across the automotive industry. You’ll be covered for 8-years or 100,000 miles, whichever comes first. While this won’t cover all scenarios, it should give you some peace of mind if you run into any major issues.
The next major consideration is fuel economy. Needless to say, an inexpensive car with low fuel efficiency will cost you more in gas money over a decade of driving it. You can use the U.S. Department of Energy’s Fuel Economy website to compare the cars you’re interested in side-by-side.
For example, the 2021 Toyota Camry gets a combined city/highway EPA rating of 26 miles per gallon (MPG), while the 2021 Nissan Versa has a rating of 35 mpg. Compare this with the 2021 Nissan LEAF — an all-electric vehicle with a 40-kWh (kilowatt-hour) battery pack — and you’ll see a big difference.
The LEAF gets 110 combined city-highway MPGe (miles per gallon equivalent), saving you up to $600 in fuel costs per year.
|Toyota Camry||Nissan Versa||Nissan LEAF|
|Fuel Economy||26 MPG||35 MPG||111 MPGe|
|Annual Fuel Cost||$1,800||$1,300||$600|
When you’re figuring out the best car for the money, it’s worth doing some math based on how much driving you plan to do per year.
Your fuel cost savings won’t offset the higher cost of an electric vehicle over the first year of driving, but over the lifetime of the vehicle, they might, especially if charging costs go down and gas prices go up.
Depreciation and Resale Value
Next, think about how long you plan to hold on to the vehicle. If you only plan to drive it for a few years before trading it in for a new one, you’ll want to choose a car with a low depreciation rate and a high resale value.
All cars lose value during the first few years of ownership, but some cars maintain their value better than others. A $20,000 car might only be worth $11,500 when you trade it in two years later — an annual depreciation rate of 25%.
Depreciation rates aren’t stable, so you’ll have to keep an eye on the market. Look up earlier model years of the car that you’re interested in and see what they’re worth now.
Luxury cars tend to have the highest depreciation rates while SUVs and subcompact cars hold their value reasonably well.
As for electric cars, it depends: Most EVs depreciate faster than conventional cars, in part because newer models have improved range and battery capacity, so earlier models are less likely to be in demand. The exception is the Tesla, which can maintain up to 90% of its value after the first few years of driving.
The Best Car for the Money 2021
With all that in mind, let’s look at the best car for the money in three key categories: the cheapest car to maintain, and best fuel economy, and the lowest depreciation rate.
Cheapest Car to Maintain: Nissan LEAF
When it comes to budget-friendly vehicles, the Nissan LEAF is one of the cheapest cars to maintain with a five-year cost to own of $34,349. That’s based on a purchase price of $31,620, with fuel costs, financing, and maintenance accounting for most of the difference.
This is slightly higher than the Nissan Versa, but considering its low maintenance costs and better fuel economy, we think it’s a better deal overall.
The LEAF has a high depreciation rate compared to other EVs, but that makes it easy to find a good deal on used models, which can be found for well under $10,000.
Best Fuel Economy: Hyundai Ioniq Electric
The 2021 Hyundai IONIQ comes in three different styles: electric, hybrid, and plug-in hybrid. The all-electric version gets an impressive 133 combined city/highway MPGe — more than twice as much as the hybrid, which only gets 59 mpg.
Still, that’s better than any gas-powered car on the market, and the fact that you can choose the best option for your lifestyle makes both styles worth considering.
The all-electric version is more expensive — starting at $33,245, compared to the hybrid at $23,400 — but it has lower annual fuel costs, giving you a sporty ride with modern styling that doesn’t break the bank.
Least Depreciation: Tesla Model 3
The Tesla Model 3’s high fuel efficiency and low depreciation rate should put it at the top of the list for anyone who wants to drive a luxury electric car. Tesla isn’t known for being a budget-friendly automaker, but the price of the Model 3 — starting at $39,999 — means it’s the most affordable Tesla you can buy.
You can expect the Model 3 to hold its value well and drive more than 100,000 miles with little to no maintenance. Plus, Tesla’s leasing options and Certified Pre-Owned program mean it’s possible to drive one home for an affordable monthly price.
Choose the Best Car for You
The best car for the money isn’t a one-size-fits-all proposition. The right car for you will depend on your personal preferences and lifestyle.
If you plan to do a lot of camping, then you may be on the lookout for the best large car with plenty of cargo space and all-wheel drive. If you’ll be driving around with friends and family in the backseat, then the best midsize car with the latest safety features may be a better fit.
Other drivers may be in the market for the best minivan, the best compact SUV, or the best hybrid and electric car.
Finally, budget is also a consideration. If you have the money to spend up-front, then buying an electric car is likely to be a better long-term investment. In addition to the three cars that we’ve featured, runners-up include the Chevrolet Bolt, Toyota Corolla Hybrid, and BMW i3.
Otherwise, you may want to consider buying a used car or leasing a car. This can allow you to choose a car with better fuel economy and performance without having to worry about the depreciation rate or resale value.
You can use this tool to find electric cars near you and see how they compare to other makes and models.