Apr 29, 2026
Buying a car has gotten a lot more expensive over the past few years, but several low-cost options that consumers have relied on to escape high sticker prices could vanish from dealer lots if changes are made to a major North American trade agreement.
A collection of non-U.S.-based automakers is threatening to take their least expensive models out of the U.S. market if the Trump administration fails to renew or weakens the U.S.-Mexico-Canada Agreement (USMCA), per a report from the Wall Street Journal. Trump has considered ending or altering the USMCA as part of his tariff policy. Parts for cheaper cars, including the Honda Civic and Toyota Corolla, come from all three countries and were formerly duty free, but now the non-U.S. parts face a 25% tariff.
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The Wall Street Journal reports (1) that those foreign automakers would no longer be able to build or sell cheaper cars in the U.S. market if USMCA disappears or is dramatically changed. While Canadian and Mexican steel and aluminum companies that supply the auto industry can apply for lower tariffs if they commit to building more manufacturing facilities in the U.S., carmakers argue such measures are not enough.
As Nissan Americas Chairman Christian Meunier noted in a recent interview, per the Wall Street Journal, tariffs have been “killing our affordable cars.”
Big savings
Eight of the 10 least expensive new cars sold in the U.S. are made by foreign automakers, per the Wall Street Journal report. And those cars can represent big savings for consumers.
The average new car cost $49,191 (2) in January of this year – and prices hit an all-time record last December. Cheaper vehicles can be nearly half that price, however.
For instance, the Nissan Sentra, which is made in Mexico, starts at $22,600. And Korea's Hyundai Venue sells for $20,550.
The days of buying any car for less than $20,000 may be gone forever, says Kelley Blue Book (3). The next-to-last one below that price was the Mitsubishi Mirage, which was cancelled in late 2024 and has since sold out at dealers. At the time, the Nissan Versa (4) was the only other new car for sale for under $20,000, and the base model also debuted in 2025 at sub-$20,000. Still, because buyers were interested in higher-level trim levels for the car, the average Versa sold for $22,315 in January.
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How to save
Even if foreign automakers stop releasing their cheapest cars in the U.S., consumers won't feel an immediate impact. Dealer lots will still have remaining inventory, and it's unclear when or how quickly any changes would be made.
Car shoppers can also consider the type of vehicle they want, as styles impact price. Full-sized pick-ups, for example, have seen prices increase substantially, topping $70,000. A compact SUV, though, sold for an average price of $36,414 in January (5).
Used cars are an option as well, and pricing has remained fairly stable, but is slowly starting to increase. Cox Automotive's Manheim Used Vehicle Value Index (6), which tracks the price of used vehicles sold at wholesale auctions, increased 6.2% last month compared to a year ago. The average used vehicle cost $25,287 (7) as of February.
Automakers will still be incentivized to attract customers. Honda (NYSE:HMC) plans to continue selling the Civic in the U.S. even if the trade deal doesn't happen, it said. Others might follow suit with some models, but even those could be subject to higher prices if the trade deal isn't secured.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
The Wall Street Journal (1); Kelley Blue Book (2),(3),(4); Dealership Guy (5); Cox Automotive (6),(7)
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Chris Morris is a veteran journalist with more than 35 years of experience, the majority of which were spent with some of the Internet’s biggest sites, including CNNMoney.com, where he was director of content development, and Yahoo! Finance, where he was managing editor. His work has also appeared on Fortune, Fast Company, Inc., CNBC.com, AARP, Nasdaq.com, and Voice of America, as well as dozens of other national publications.
