Affordable used car crisis coming: Axing of affordable new hatchbacks, and big price rises for the 2026 Toyota Yaris and Mazda 2 is bad news for used buyers

Australia is facing a used-car market black hole.

With the number of affordable new small-car options shrinking annually due to more-expensive SUVs, so too will be the number of affordable used small-car options.

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We’re already seeing this affordability catastrophe unfold. And the numbers tell a sobering story.

The great small-car cull

Since 2016, Australia has gone from having over 40 new light and small car options under $30,000 (in today’s money), to just 10 right now – and falling. And even if you add the proliferation of cheap new small SUVs (mostly from China), that only adds another 10. That’s a 50 per cent drop right there.

This means that there will be far fewer affordable used smaller cars to go around as we head towards the 2030s and beyond.

Or, in other words, Australia will soon run very low on affordable, low-mileage second-hand small cars under 10 years old, adding substantially to the cost-of-living pressures for many people who cannot or won't buy new.

Since 2020, we’re already seen Toyota, Ford and Honda drop their sub-$20,000 models, namely the (non-hybrid) Yaris, Fiesta and Jazz hatchbacks respectively, creating a void filled by new Chinese brands MG, GWM and BYD.

In Ford’s case, its cheapest new passenger vehicle in 2026 is the Everest Ambiente 4WD SUV from $58,990 (before on-road costs), having also abandoned the Puma and Focus, as well as the larger Mondeo, Escape and Endura, since the start of this decade.

Why the small-car cull? A long-term sales slide against SUVs, coupled with the massive investment required in electric vehicles (EVs) to meet coming legislated zero-emissions targets, stalled decades of on-going small-car development and evolution.

Some industry analysts even believe that the middle of last decade was the era of “peak small-car”, as defined the highly-successful Volkswagen Mk7 Golf – a model widely considered superior to its 2020 Mk8 successor.

It’s been reported that VW cancelled scores of new-model projects in the aftermath of 2015’s Dieselgate emissions-cheating scandal, including shelving an advanced redesign of the Golf in favour of today’s reskin, pivoting instead to EVs to help atone for the disaster.

Others seem to have followed suit. In fact, if you look at today’s remaining small cars, most sit on architectures that date back to last decade.

The Mazda 3’s debuted in 2013; the Peugeot 308 in 2014; Subaru Impreza and Honda Civic in 2016; the Hyundai i30 in 2017; Toyota Corolla in 2018; and Kia K4 in 2020.

Defying depreciation

Incredibly, some high-quality used small cars with a few years under their belts are holding their value to an almost comical degree, especially with fewer than 100,000km.

A 2016 Mazda 2 auto from $16,990 when new is still worth at least $13,000 today – and some lower-mileage examples match the original price. Likewise, a 2018 Honda Civic VTi from $22,390 is still a $20,000-plus proposition.

But nothing beats the Toyota hybrid phenomenon.

A 2019 Corolla Hybrid that new started from $25,870 is likely to cost upwards of $24,000 today, with some even nudging $30,000 in the right colour and specification.

And a 2021 Yaris SX hybrid from $27,020 new… is still very nearly that amount today at its lowest point, even with 70,000km on the clock, meaning owners could be making a profit after all these years. Great news for them. Bad news for used-car buyers today.

Your cheap choices

The only quality, reliable and economical used small cars currently priced in the $10,000 to $15,000 bracket are now mostly older (pre-2015), higher-mileage (150,000km-plus) or ex-repairable write-offs (including flood/hail damaged cars, since fixed). Do not risk buying the latter.

Otherwise, Australian used small-car buyers must roll the dice on niche European brands with (albeit at-times unfounded) reputations for expensive maintenance costs, orphaned Holdens like the (ex-Opel) Astra or newer Chinese small cars with below-par safety and/or driving dynamics, like a pre-2024, previous-generation MG 3.

Unfortunately, with spiking fuel prices, hybrids are completely out of the question under $15,000 unless it’s a 15-year-old-plus Toyota or Honda with moon-shot mileages and/or ex-ride-share taxis.

Finding a cheap used SUV alternative

So, it is logical to conclude that, while the number of new small car options is declining, there must be more small SUV choices, right?

Not for budget buyers in the sub-$15,000 bracket, sadly.

Quality, second-hand smaller SUVs and crossovers are also pricing themselves out of reach for lower-income groups and younger drivers seeking inexpensive yet reliable vehicles.

Consider the case of a seven-year-old Mazda CX-3 or Suzuki Vitara 1.6 with reasonably-low mileage (under 100,000km).

These current-shape models have been chosen as two of the better and more-reputable small SUVs on offer, due to their uncomplicated non-turbo engines and robust torque-converter automatics, instead of the usually problematic continuously variable transmission (CVT) or dual-clutch transmission (DCT) found in most alternatives.

A 2019 CX-3 auto that cost $23,790 new (which is about $30,000 adjusted for inflation today) currently retails for between $20,000 and $25,000 depending on condition. Again, depreciation-defying.

Likewise, a 2019 Vitara 1.6L 2WD that cost $24,490 new (about $32,500 in 2026 money) is still commanding between $19,000 and $25,000 today if well-maintained. We’re talking about seven-year-old models here.

Little wonder consumers are forced into newer brands from China with long warranties and shiny touchscreens but unproven long-term reliability, resale and access to genuine spare parts/labour.

The bottom line is that a generation of consumers seeking a cheap and economical used small car will be left wanting.

At 18, Baby Boomers had their decade-old Datsun 1600s and Volkswagen Beetles; Gen X its Ford Lasers and Holden Geminis; and Millennials their Hyundai Excels and Mazda 323s to rely upon.

What will next-gen used-car buyers be able to afford?