What is the cheapest new car in Australia?

Inflation is the economic effect of prices increasing over time, this impacts every item across society. But as I’m a motoring journalist and don’t have a PhD in economics (like my father did), so I’m going to stick to cars.

While new car prices have been rising in recent years, thanks to inflation and other market forces which we’ll explain later, to the point that there are no new cars under $20,000, there are still affordable new vehicles if you’re looking for the best value new car.

Below we’ll guide you through the cheapest new cars available in Australia today and explain why they do cost more than ever before.

What is the cheapest new car available in Australia?

That title belongs to the Kia Picanto Sport at the time of publication, which is priced from $18,290 plus on-road costs. Now, eagle-eyed readers will notice I said just a few sentences earlier that there ‘are no new cars under $20,000’ and the mathematicians will know that $18,290 is less than $20,000 (like I said, my dad was the number’s guy. I ended up at the shallow end of that gene pool but can still work that one out).

But what I told you was true, because you won’t get the Picanto Sport off the dealer lot without spending more than $20k because of the on-road costs like dealer fees, stamp duty, registration and more. This usually totals a few thousand dollars and in the case of the Picanto, you’re looking at approximately $21,190 in-traffic, depending on where you live.

When are cars considered new?

Cars are considered ‘new’ until they are registered, that is when the sale is officially recorded by the Federal Chamber of Automotive Industries. A car can still be considered new until it has been registered even if it has several hundred kilometres on the odometer, as a dealer can use it for test drives.

Is there a difference between new and brand new?

Having just said what I said above, there is a key difference between a ‘new’ car and a ‘dealer demonstrator’, which is a car that is often registered by the dealership to record a sale (maybe to hit a monthly target) and then been used for test drives. These can have up to 10,000km on the odometer, but you would still be the first ‘official’ owner of the car, arguably making it ‘new’ in a broader sense of the word.

How expensive are new cars in Australia at the moment? Are car prices increasing?

As mentioned in the introduction, car prices increase as part of the normal process of inflation, but in recent years there has been steeper growth for a variety of factors. During the 2020 pandemic supply was enormously constrained and yet, with travel restrictions, people had money to spend. This led to a sharp increase in cost, thanks to the simple economic concept of ‘supply vs demand’ - with demand out-stripping supply. Car companies took advantage of these conditions and have maintained these higher prices in the post-pandemic world.

At the same time as this was happening car companies have been adding more equipment to cars, primarily safety features. These more complex safety systems - such as autonomous emergency braking, rear cross-traffic alert, central airbags, etc - are expensive and are another major factor in the increased cost of new cars compared to years gone by.

Pre-pandemic there were a raft of cars under $20,000 including the Fiat 500, Honda Jazz, Hyundai Accent, Kia Rio, Mazda2, MG3, Mitsubishi Mirage, Renault Clio, Skoda Fabia, Suzuki Swift and Baleno and Toyota Yaris. Most of these are now either discontinued or have dramatically increased in price.

What is considered a cheap new car?

These days anything under $30,000 can be considered affordable, if not downright ‘cheap’ in the strictest sense of the word. The days of sub-$20k, let alone sub-$15k cars are a thing of the past. 

Cars are only likely to get more expensive in the coming years as more carmakers switch to hybrid or electric powertrains to cut emissions, so if you’re waiting for prices to come down you may be waiting indefinitely unless there is a dramatic change of circumstances.

How has this changed over the years?

In the not too distant past there was a range of cars available for under $15,000. For $14,990 drive-away you could get a Kia Picanto, Holden Spark, Mitsubishi Mirage and Suzuki Celerio, and a Mazda2 cost $14,990 plus on-road costs. 

While car costs have risen over time, the last truly ‘bargain basement’ car was the Chery J1 which retailed for $9990 drive-away in 2013. Even against its $15k rivals it was dramatically cheaper, but the quality and safety wasn’t up to the expectations of Australian consumers and it soon disappeared.

What should you consider when looking for a cheap new car?

There are a variety of factors to consider when looking for a cheap new vehicle, whether it’s an SUV, ute, hatch, sedan or wagon. The best advice I would give is look for the ‘best value’ rather than the ‘cheapest’ because simply buying the car with the lowest sticker price may not save you the most money in the long-run.

So, try and find something in your budget from a brand known for reliability and dependability. Cross reference the list of standard features on any cars you short-list to make sure you’re getting the most value for each dollar you spend. Crucially, check the servicing costs, because if you make the wrong choice, the money you save on the front end of the deal you may end up losing on the back-end ownership costs.

Top 10 cheapest new cars available in Australia

1. Kia Picanto Sport - $18,290 ($21,190 drive-away*)

Once the focal point for affordable cars, city-sized hatchbacks have become increasingly rare in recent years as SUVs take over every size in the market. The Picanto is one of the few remaining and despite rising prices it remains the cheapest brand new car on sale at the time of publication.

2. Chery Tiggo 4 Pro Urban - $23,990 drive-away

The Chinese brand may no longer start its range at less than $10,000, but the new Tiggo 4 Pro is a much nicer vehicle than J1 in every aspect. At this price the entry-grade Urban variant is the most affordable compact SUV you can buy, but even the higher grade Ultimate is only $26,990 drive-away.

3. Suzuki Swift Hybrid - $24,490 drive-away

This is a prime example of inflation, increased safety and more technology coming together to make for a more expensive model. The Swift is no longer a sub-$20k small car, but this latest model has more safety technology and a hybrid powertrain, and still comes in it at what is now a very affordable drive-away price.

4. Suzuki Ignis - $24,490 drive-away

While the Chinese brands tend to grab the headlines for affordability, Suzuki has stuck to its roots and is offering not one, but two sub-$25k models. The Swift’s compact SUV stablemate, the Ignis, is a good value option for those on a budget.

5. Hyundai Venue - $22,500 ($25,990 drive-away*)

Hyundai may have made its name with ‘cheap and cheerful’ models like the Excel and Accent, but in 2025 the brand has repositioned itself to a more polished and expensive part of the mainstream market. That leaves the Venue small SUV as its most affordable offering, especially as the previously good value i30 hatch variants have disappeared.

6. MG3 Excite - $25,780 drive-away

MG made a splash when it entered the Australian market, arriving with razor-sharp pricing to help lure buyers to what is ultimately an all-new brand (despite the old name). All three MG models were less than $18,000 drive-away pre-pandemic and it made it a sales hit. This new, more advanced model has made a jump up in price but still remains relatively cheap by current standards.

7. Mazda2 - $22,870 ($26,797 drive-away*)

It may be getting older but the Mazda2 has remained to give the Japanese brand an entry-point to the range below its more ‘semi-premium’ options. It has crept up in price over the years but is a prime example of an affordable car with a reputation for good value.

8. MG5 - $26,863 drive-away

While safety has been a major factor in the increase in cost in recent years, MG very deliberately bucked the trend of loading its small sedan up with too much expensive technology in order to keep it affordable. The company was adamant that it wanted to offer people without a big budget the chance to get into a brand-new car, rather than get stuck on the used car market.

9. Kia Stonic - $25,460 ($27,740 drive-away*)

With the demise of the Rio and the arrival of the K4 to replace the Cerato, Kia’s next most-affordable model after the Picanto is now the Stonic compact SUV. It’s quite a jump up from its smaller sibling - more than $6550 or an extra 30 per cent - but in today’s market the Stonic is still a relative bargain. 

10. MG ZST - $28,408 drive-away

This is a case of get-in-quick as, at the time of publication, the MG ZST was in run-out. At less than $30k for a small SUV it represents a lot of metal for the money. The good news is, MG has a new-generation ZS petrol due later in 2025 and that isn't as sharply priced.

* Drive-away prices set to Sydney postcode, prices may vary for these models depending on your specific location. Other prices are national drive-away deals.