Who Likes Cheap New Cars? Phoenix Does, Detroit Doesn't

When you think of Phoenix, Arizona, you think of stands of cactus, rattlesnakes and unrelenting heat that can fry an egg on the hood of a vehicle. Now there’s another reason to think of the southwestern city. Phoenix has the highest percentage of cheap car sales than any other major metropolitan area, according to the car-buying site Carjojo.

Carjojo has analyzed sales of the 10 cheapest new cars in the 20 biggest American metropolitan areas. Phoenix residents buy the cheapest new cars at more than twice the average rate of residents of America’s big cities.

Sales of cheap cars accounted for 3.6% of all sales in Phoenix. Other frugal metros are San Diego, Chicago, Tampa and St. Louis. Cheap cars make up 1.7% of all car sales in the 20 metropolitan areas looked at by Carjojo.

“We didn’t study other reasons why the sales rate would vary so widely between different cities,” Carjojo founder and president Peter Levy said on the company website, “but the reasons could include the availability of used vehicles, the places manufacturers prefer to ‘send’ their entry-level cars, the price of gasoline, and even the weather (the six cities with the poorest sales of cheap cars are cold-weather cities — and cheap cars don’t have all-wheel-drive).”

The favorite cheap car for Americans is the Nissan Versa (manufacturer’s suggested retail price of $14,545), which accounts for more than one-fourth of all sales of the 10 cheapest cars combined. There were 20,743 Versas sold in May versus the same month of a year ago in the 20 metro areas analyzed by Carjojo, and those sales made up 27.4% of the sales of cheap cars in those markets.

The Chevy Sonic/Spark was second with 14,956 cars sold, or 19.7% of cheap cars sold in the 20 metro areas. Nine car models were included on the list.

“American new-car buyers aren’t enamored with cheap compact cars,” said Levy. “They like SUVs and pick-ups that cost more. The Versa has been a small success, attracting more cost-conscious buyers than some of the other vehicles whose main selling point is the price.”

Among the cities eschewing vehicle purchasing frugality are Detroit, Boston, New York and Minneapolis. Cheap car sales accounted for just 0.4% of all sales in Detroit. Boston and New York are cities with low car-ownership rates.