View in browser Issue #353 Sunday, June 29, 2025 Why the $25,000 car is going extinct Can’t find an affordable car anywhere? You’re not the only one.
BY MARK DENT In late 2021, Ford released the Maverick, a compact pickup truck. At roughly half the cost and half the weight of the popular F-150, it was meant to be an antidote for excess, and it worked. With a manufacturer’s suggested retail price (MSRP) of $19,995 for the base level, the Maverick drew rave reviews from critics and a rush of interest from consumers who wanted a nice pickup without having to splurge (and who never hauled anything, like pretty much every truck buyer). The truck, however, was so popular that dealers sold them, on average, at ~25% above MSRP during the first few months after its release, leading Consumer Reports to name the Maverick as one of the worst deals for a new car. Since then, Ford has consistently hiked the retail price for new models of the Maverick: The 2025 base version retails for $28,145 — a 41% price hike from just four years ago. The Maverick is one example of a contradiction that’s become common in the auto industry: Cheap new vehicles, the type of entry-level car favored by young buyers and many in the middle class, have become vanishingly rare, allowing automakers to hike prices on the scarce number that remain.
In February 2025, the share of overall new auto sales under $25k was 4.8%, according to the automotive pricing source Edmunds, down from 23% during the same month in 2019.
The Hustle And this isn’t just a case of inflation affecting the entire vehicle market: Kelley Blue Book pricing data across vehicle brands shared with The Hustle reveals that many brands associated with budget-friendly vehicles — such as Hyundai, Dodge, Toyota, and Kia — saw price increases well above the industry average from March 2019 to March 2025.
The same data indicates many luxury brands — Audi, Jaguar, Porsche — saw some of the smallest increases. The average prices for those brands are now lower than in 2019, accounting for inflation. Similarly, vehicle classes most associated with thrift, such as compact cars, subcompact cars, minivans, and mid-size cars, have all exceeded inflation in the same timeframe. So, given the popularity of models like the Maverick, why have cheap vehicles gone nearly extinct? Higher margins on similar costs Back in the early 20th century, affordable cars were key to the widespread adoption of the automobile. But in modern times they’ve been a drag for automakers for a simple reason: nice, expensive vehicles carry higher profit margins. The Hustle Whether a manufacturer is producing an affordable midsize or compact car or a luxury car geared toward high-income earners, many of the fixed costs are the same, says Christian Seabaugh, a features editor for Motor Trend who’s written about cheap cars: Engineering, design, and marketing
Emissions and crash standards
Materials such as steel, which are bought in bulk and typically used across the entire line of an automakers’ fleet. There are some variations in costs between lower-end and higher-end vehicles. Larger models require more materials, and luxury models might be designed and engineered by higher-paid employees or feature higher-performing engines, driving up the cost. American brands were bleeding market share for many years in budget-friendly, smaller vehicles and have, more or less, decided to give up on the segment, Seabaugh says. “For them, it’s just not worth it,” he says. The Ford Maverick was so popular in early 2022 that Ford stopped taking orders and dealers raised prices ~25%. (Scott Olson/Getty Images) Profit margins on specific vehicles are a well-kept secret in the industry. But the difference between Ford’s high-end and low-end truck models, for instance, illustrates why focusing on expensive vehicles with lower volume makes more sense than the opposite. Analysts have estimated margins on the Ford F-150 to be ~20% per vehicle and that F-150s account for 90% of Ford’s total profits.
per vehicle and that F-150s account for of Ford’s total profits. The Maverick came with a “tiny” profit margin, wrote Auto Wire’s Steven Symes, discouraging Ford and its dealers from supplying it. Given these economics, automakers have ditched many once-affordable models that were available in the US just a few years ago: Chevy Spark
Dodge Dart
Ford Fiesta
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