Getting a good deal on a secondhand car used to be easy. Now dealers are charging thousands of dollars more for used cars to cope with the lack of supply. A global chip shortage has forced numerous carmakers to slow down the production of new cars, causing used car prices to soar to 10.5% last June.
According to Cox, new car inventories are down by 54% in the U.S. due to the production halt. Rental agencies had to sell a third of their inventory to survive during the pandemic. They then resorted to buying used cars to replenish their inventories in order to keep up with the new travel boom. These factors will make it even harder for the average buyer to snag a car, much less land a deal.
Experts say it will take months before supply chains are back to normal. The good thing is there’s still lots of budget-friendly options available for potential car buyers like you. You just have to know where to look.
Torn between buying a new economy car or a used luxury car for the same price? You’ll probably find a lot of decent options for less than $25,000, so we’ve listed the pros and cons for each one to help you make the best decision. Here are some things to think about if you're wondering, "should I buy a used luxury car?"
New Economy Cars & Other Vehicles Under $25,000
Economy cars are the best choice for buyers on a budget. They may not be the most stylish cars around, but they’re easy to maintain and extremely fuel-efficient. Here’s our list for the top five new economy cars (including some bigger ones that are relatively cheap) in 2021.
2021 Kia K5
The 2021 Kia K5 packs an available 2.5-liter turbo engine with an 8-speed dual-clutch automatic transmission in a midsize sedan body. It’s larger than most economy cars, but it has incredible fuel economy with an EPA-estimated 24/32 MPG for city/highway driving.
2021 Honda Civic
The ever-reliable Honda Civic continues to be a favorite among drivers for its athletic performance and fuel efficiency. The 2021 model houses an available turbocharged, intercooled 1.5L engine that produces 174 horsepower. That’s quite fast for an economy car with an estimated fuel economy rating of up to 32/42 MPG city/highway.Read more about the Honda Civic’s reliability and common problems here
2021 Volkswagen Jetta
The 2021 Volkswagen Jetta is one of the most fuel-efficient vehicles around, with its base 1.4-liter engine getting an estimated 40 MPG on the highway. For a sportier look, you can opt for the Jetta GLI, which is the sedan equivalent of the Golf GTI.Read more about the Volkswagen Jetta’s reliability and common problems here
2021 Hyundai Sonata
Kelley Blue Book’s Andy Bornhop calls the 2021 Hyundai Sonata the best Sonata yet— and that’s no exaggeration. The 2021 model enters the second year of its eighth generation virtually unchanged, with plenty of features and fantastic fuel economy. The new Sonata has an estimated fuel economy rating of up to 28/38 MPG city/highway.Read more about the Hyundai Sonata’s reliability and common problems here
2021 Nissan Sentra
Nissan’s best-selling compact sedan proves that well-designed economy cars can hold their own in a world of crossovers and trucks. The 2021 Sentra averages up to an estimated 29/39 MPG with a 2.0-liter 4-cylinder engine that produces 149 horsepower and 146 lb-ft of torque.Read more about the Nissan Sentra’s reliability and common problems here
Used Luxury Vehicles Under $25,000
Want that premium car feeling without paying premium prices? You might want to check out these used luxury vehicles. If you can shoulder the high maintenance and repair costs, you’ll be rewarded with a handsome, high-performance machine that will surely make friends and fellow car lovers green with envy. You can reap the benefits of buying a used luxury car with the following models:
Used 2011 Jaguar XJ
The 2011 Jaguar XJ is easily one of the nicest-looking luxury vehicles for its price. All the premium features you’ve come to expect from a flagship luxury sedan, such as active suspension, blind-spot monitoring, and full Bluetooth connectivity, come standard with the 2011 Jaguar XJ.
Used 2010 Porsche Cayenne
Porsche is best known for producing high-quality sports utility vehicles. The Cayenne was the carmarker's first foray into the SUV segment, and it turned out well. The 2010 model blends modern luxury features with fulfilling off-road performance.Read more about the Porsche Cayenne’s reliability and common problems here
Used 2010 Lexus SC 430
With its elegant sports coupe style, what’s not to love about the 2010 Lexus SC 430? It offers a smooth ride with a 4.3-liter V8 engine and a 6-speed automatic transmission, with sequential-shifting mode for those who prefer the feel of a manual. It’s essentially a touring vehicle with luxury credentials.
Used 2007 BMW M6
Only a handful of sports coupes and Italian exotics are able to deliver on luxury, performance, and comfort— but the 2007 BMW M6 does all this effortlessly. A user on Kelley Blue Book summed it up best: “Who needs music? The V10 note and exhaust rumble from the Eisenmann mufflers is like an orchestra in itself.”
Used 2001 BMW M5
An Edmunds reviewer described the 2001 BMW M5 as the king of all performance sedans. The M5 sports a low stance with 18-inch Z-rated wheels, aluminum suspension parts, and stiffer shocks. Thanks to its variable-assist power steering, the 2001 BMW M5 works as both a daily driver and a luxury performance sedan.
The right car is different for everyone. We’ve laid out the pros and cons for new economy cars and used luxury vehicles, but it’s up to you to decide what’s best for your budget and driving needs. Whichever one you buy, you should always remember to practice proper maintenance to keep your car’s looks, performance, and value intact.