The extravagant tends to grasp the imagination. And these days, automotive extravagance abounds. Cars that break price, power, and speed barriers are proliferating around the globe, from manufacturers large and small, in shops from Sweden to Japan.
There's the world's fastest and likely most expensive car, the 252-mile-per-hour, $1.3 million Bugatti Veyron. Less expensive but equally stunning fare is available from the likes of Aston Martin, Ferrari, and Lamborghini.
Certainly there is cachet to owning cars that cost from $100,000 to more than $1 million, but the point is that you don't need to drop seven figures these days to get a great car. In fact, in some cases you barely need to scratch five.
That's because, while auto makers will happily sell you a premium or luxury car stuffed with pricey options, they all offer a wide range of affordable, and surprisingly well-made, cars, minivans, light trucks, and SUVs. In fact, despite the aspirational nature of car ownership as well as the growth of luxury nameplates in the U.S., the $20,000 sticker price has become more and more important to carmakers.
In fact, of the top 10 best-selling cars in the U.S. in 2005, nine start at prices under at $20,000.
Indeed, according to consumer guide Edmunds.com, the $20,000 market has a staggering range of choice. Edmunds.com lists 7 convertibles, 20 coupes, 22 minivans, 25 SUVs, 29 trucks, 18 wagons, and 50 sedans.
Granted, these dollar figures represent the MSRP for the base model, and expensive options and performance packages can add thousands to the bill. For example, the MSRP for the Dodge Ram 1500 with rear-wheel drive is $21,150, but that price more than doubles for the Dodge Ram SRT-10 Quad Cab, which offers an 8.3-liter V-10 engine capable of 500 horses — adding up to $51,810.
Industry insiders say the price point has grown more populated as the mass market's means and expectations have grown. "The thing is, that's where the heart of the mass market is. The big push in the industry has been right there," says Allen Levenson, vice-president for sales and marketing at Manhattan-based Asbury Automotive Group, one of the countries' largest dealership groups.
This summer, the competition is likely to heat up even more. That's because cars in this bracket are prime targets for steep incentives. Manufacturers commonly slash prices — in the form of juicy discounts and lenient financing deals — to move lagging inventory, and this summer, especially for U.S. auto makers, has been especially brutal.
Beware: Creative pricing
As a result, DaimlerChrysler is offering a cash rebate worth between $2,000 and $2,500 on both the Chrysler Town & Country and Dodge Caravan minivans, as well as 0% financing. Ford Motor, meanwhile, has a similar deal on its still popular F-150 series, which is worth up to $3,000.
BusinessWeek.com took a look at some of the most popular cars in the price bracket. Options abound, making for a lengthy list of vehicles around $20,000. That makes sense since that forms the center of the consumer market. Instead of simply listing all the vehicles available at that price point, we took a look at the best-selling vehicles in the country, determining which of those could be had for around $20,000.
Because dealers and manufacturers tend to be creative with final sticker prices, we chose cars with base prices between $18,000 and $22,000 to get an accurate picture. The list is ordered by best sellers since the beginning of the year according to Automotive News. And since the industry is in such a state of flux, with new models continually gunning for the top spots, we included information about sales relative to the same period last year.
Hybrids that qualify
The sedan segment boasts the most plentiful models in this price range. The best-selling sedans in the U.S., the Toyota Camry and Honda Accord, retail for $18,270 and $18,625 respectively. The Chevrolet Impala and Nissan Altima trail closely behind with base prices of $21,445 and $19,600 respectively.
Trucks and SUVs constitute an important part of the market as well. Ford's most popular model and the best-selling car in the entire country is still the F series truck. Of course, those vehicles sell for base prices that reach close to $40,000. But a basic entry-level model costs just $19,640. Equally, one of Ford's SUV successes, the mid-size Escape, also comes in at under $20,000.
On the other end of the fuel economy spectrum, Toyota's (TM ) hybrid, gas-electric Prius costs just $21,725. Honda's (HMC ) own Civic Hybrid comes in at about $450 more—and the company's outgoing, diminutive Insight hybrid fetches only $19,330.
If even the abundant choices now available aren't enough for you, you should know the number of models in the range is only likely to grow. After all, as Levenson says, price "is not a trivial factor."