Australia's cheapest cars

With new cars often being the second largest purchase people make after housing, it's no surprise the Australian market is in no short supply of reliable, low cost cars.

To help those navigating the new car minefield in search of cheap car prices, we've compiled a list of the 10 most affordable and reliable cars in Australia, with a brief summary of their pros and cons, in a bid to help you choose wisely, and frugally. Don't let their low cost fool you of their high quality – each of the affordable cars listed are packed with excellent safety features, good fuel economy, and comfortable interiors, ensuring you get the best bang for your buck.

It's important to note that this article uses the manufacturer's recommended retail price (MRRP) only and does not consider on-road costs, depreciation and vehicle running costs, which are a significant part of the cost of owning and operating any vehicle.

For a more holistic view of car ownership, RACQ publishes its annual vehicle running costs survey. The survey looks at the myriad real costs of car ownership, including registration, insurance, servicing, costs, fuel costs and more.

Remember, too, that lockdowns and social distancing don't necessarily mean you can't purchase a new car.

Much of your new car research can be done online and some dealers are taking proactive initiatives aimed at keeping sales ticking over during the coronavirus crisis.

These include, encouraging consumers to take virtual tours of vehicles; disinfecting interiors to enable safe test drives; and even pursuing so-called contactless test drives, where the dealer will bring the vehicle to you, disinfect it and hand the keys over in a zip-lock bag.

Australia's 10 most affordable cars

• Mitsubishi Mirage ES - $13,490 (MRRP)
• Kia Picanto S - $14,990 (MRRP)
• Honda Jazz - $14,990 (MRRP)
• Honda City - $15,990 (MRRP)
• MG MG3 Core - $15,990 (drive away)
• Kia Rio S - $17,490 (MRRP)
• Suzuki Baleno GL - $15,990 (MRRP)
• Suzuki Ignis GL - $15,990 (MRRP)
• Toyota Yaris Ascent - $15,390 (MRRP)
• Skoda Fabia 70 TSi - $16,890 (MRRP)

Mitsubishi Mirage ES

Category: Micro car
Price: $13,490 (MRRP)
Warranty: 5 years/100,000km
Fuel consumption: 4.7L/100km
Safety rating: Five star ANCAP (2013)

If you're looking for Australia's cheapest small car, then look no further. With its tiny sticker price, the bargain basement Mitsubishi Mirage holds the mantle of Australia's cheapest new car.

Powered by a 1.2-litre three-cylinder engine hitched to a five-speed manual, the little five-door hatch sips fuel at a frugal 4.7L/100km. It's pleasingly easy to drive and operate with a tight turning circle and compact dimensions. A lack of soundproofing means its high revving engine intrudes a bit on the frugal but otherwise spacious and well-laid-out interior.

Its comprehensive standard safety features include dual front and side airbags, head-protecting side curtains, antilock brakes (ABS), electronic brake distribution (EBD), emergency brake assist (EBA) and electronic stability control (ESC). A February 2020 update introduced standard autonomous emergency braking (AEB). While its sticker price is undoubtedly keen, last year's RACQ annual running costs survey also judged the Mirage ES 1.2L the cheapest small car to own and operate in Queensland.

Kia Picanto S

Category: Micro car
Price: $14,990 (MRRP)
Warranty: 7 years/unlimited
Fuel consumption: 5.0L/100km
Safety rating: 4-star ANCAP (2017)

Like most of the players here, the Kia Picanto is small and nimble, which makes it a great city car.

This high-quality, low cost small hatch comes nicely packaged in an attractive and contemporary bodyshell, powered by a 1.2-litre petrol four-cylinder, driving through a five-speed manual. The interior is surprisingly roomy for a city car and smartly designed, with good quality materials and an excellent infotainment system. Fuel economy is a reasonably thrifty 5.0L/100km, or for another $1500 you can have the slightly thirstier four-speed automatic. Steering, ride and handling are all impressively tuned, making Picanto one of the more satisfying affordable cars to drive on this list.

Featuring an equal-industry best seven-year warranty, the Picanto also boasts a strong safety and standard equipment package that includes six airbags, stability control, four-wheel disc brakes, a reversing camera, and rear parking sensors. Other standard features include Apple CarPlay and Android Auto connectivity, cruise control, dusk-sensing headlights, daytime running lamps, and a seven-inch touchscreen infotainment system. All of which helps explain how the Picanto S finished with a bronze medal in the Light Car category at the 2019 Australia's Best Cars Award.

Honda Jazz

Category: Light car
Price: $14,990 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 6.2L/100km
Safety rating: 5-star ANCAP (2014)

If carrying capacity and interior versatility is important, then it's hard to go past Honda's brilliantly versatile Jazz hatch. With its upright body styling and clever seating configuration, the Jazz makes light work of Ikea flat packs and other cargo.

Japanese-designed and engineered but built in Thailand, the little Honda also stands out from the crowd for the quality of its interior finishes. Its lively 1.5-litre four-cylinder engine (88kW/145Nm) is matched to a nicely weighted five-speed gearbox, but shows its age via its 6.2L/100km fuel consumption, which is higher than most others listed here. Spending another $2000 on the CVT-equipped version saves about 0.5L/100km. Nicely consistent steering and general polish to the controls makes it an enjoyable drive.

Standard equipment includes dual front, side chest and side head airbags (curtains); antilock brakes (ABS); electronic brake distribution (EBD); electronic stability control (ESC); seat belt reminders on all seats; and reversing collision avoidance. Packaged neatly in the Honda's iconic design, this cheap car option is perfect for the savvy, stylish buyer.

Honda City

Category: Light car
Price: $15,990 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 5.9L/100km
Safety rating: 5-star ANCAP (2014)

Honda has cleverly stacked the deck in this game with the inclusion of the affordable City, which is essentially a Jazz dressed in a more conventional four-door sedan body style.

Some people prefer small sedans to hatches, and the City is arguably the best option in the compact B-segment category. Sporting the same basic mechanical package as the Jazz hatch, the compact sedan somehow manages to slightly better its stablemate's fuel consumption, despite being about 40kg heavier.

Standard safety features include dual front, side chest and side head airbags (curtains); antilock brakes (ABS); electronic brake distribution (EBD); electronic stability control (ESC); and seat belt reminders on all seats. If a small sedan is your preference, the Honda City is an excellent low-cost car for sale.

MG MG3 Core

Category: Light car
Price: $15,990 (drive away)
Warranty: 7 Years/unlimited
Fuel consumption: 6.7L/100km
Safety rating: Not yet rated by ANCAP

The badge might suggest classic British sports car but don't be confused – MG is Chinese-owned these days and sports cars aren't yet part of the new owner's remit.

Chinese-made cars are not yet as familiar to us as those made in Japan and Korea but MG is doing its best to get the compact MG3 on the radar of Australian consumers with keen pricing, an equal-industry best seven-year warranty. It seems to be working, too, with sales up an impressive 93% compared with the same time last year – admittedly off a sub-1000-unit base.

With its eye-catching styling the MG3 certainly stands out as something fresh and different, although its 1.5-litre four-cylinder engine (82kW/150Nm) and four-speed automatic are utterly conventional. So conventional in fact that the combination sips fuel at a rate of 6.7L/100km, making it the thirstiest car featured here.

The absence of an ANCAP rating will raise some flags with buyers, as will its 3-star Euro NCAP rating, which suggests it's not the best choice if safety is paramount. Despite this, standard safety features include six airbags, antilock brakes (ABS), electronic brake distribution (EBD), emergency brake assist (EBA), electronic stability program (ESP) and active cornering brake control.

Inside, the interior of this Core model features lairy tartan-patterned seat trim, an excellent 8-inch multi-function colour touch screen with Apple CarPlay, Bluetooth connectivity, and steering wheel audio controls. Aimed at first car buyers, the MG MG3 Core is a great option for those searching for a small, reliable car.

Kia Rio S

Category: Light car
Price: $17,490 (MRRP)
Warranty: 7 years/unlimited
Fuel consumption: 5.6L/100km
Safety rating: 5-star ANCAP (2017)

With a good-sized boot and impressively roomy interior, the Kia Rio is a step up in the size stakes over some of the sub-compacts mentioned here, including its stablemate the Picanto.

You can comfortably ferry four people in a Rio, or five at a pinch, with room for their luggage. Being a base model there's no flash alloy wheels or other accoutrements, but the styling is contemporary and attractive, as is the interior presentation. Its excellent seven-year warranty will be a lure to many buyers. The Rio is also finished to Kia's generally high standards and features a quality 7-inch multimedia touch screen, with Apple CarPlay and Android Auto capability, that is impressively intuitive to use. Navigation is not standard, but you can mirror this feature from your smartphone. You need to stir the 1.4-litre four-cylinder (112kW/192Nm) along a bit to get the best out of it. In combination with a six-speed manual, the powertrain returns a reasonably efficient 5.6L/100km. Ride and handling are above average, thanks to local suspension tuning, which Kia has made something of a trademark.

On the safety front, the Kia Rio S boasts dual front, side and curtain airbags; antilock brakes (ABS); electronic stability control (ESC); hill start assist (HSC); seat belt reminders for all seats; reverse parking sensors; and a rear-view camera with parking guidelines. However, you need to step up to the top-spec GT Line to get additional features like autonomous emergency braking (AEB) and lane support systems (LSS).

For a cheap small car with a roomy interior, the Kia Rio excels in affordability and reliability.

Suzuki Baleno GL

Category: Light car
Price: $15,990 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 5.1L/100km
Safety rating: Not yet rated by ANCAP

Suzuki has been a consistent quiet achiever in the small car space for decades, during which time it has built a well-deserved reputation for making affordably priced and stoically reliable compacts.

Of all the vehicles listed here, the Indian-built Baleno comes closest to rivalling the Honda Jazz for interior spaciousness. Its roomy cabin offers comfortable space for four passengers, five at a pinch, while the 355L boot is bigger even than that of the Jazz. The interior plastics aren't up to the standard of Honda or Kia but are well-proven and durable.

Standard equipment includes a 7-inch touchscreen with satellite navigation, Apple CarPlay and Android Auto connectivity, plus Bluetooth phone and audio streaming. A five-speed manual transmission connects to the Baleno's 1.4-litre four-cylinder engine (68kW/130Nm), returning competitive combined cycle fuel consumption of 5.1L/100km.

Like the MG MG3 the Baleno lacks an ANCAP safety rating and some of the latest safety features like autonomous emergency braking (AEB) and lane departure warning (LDW). However, it does come with such standard safety features as dual front airbags; front and rear side curtain airbags; antilock brakes (ABS); electronic stability control (ESC); and a rear-view camera.

Suzuki Ignis GL

Category: Light SUV
Price: $15,990 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 4.7L/100km
Safety rating: Not yet rated by ANCAP

If you're searching for an SUV, then the Suzuki Ignis is your answer for a low-cost reliable car. The only SUV to make our cut for Australia's most affordable cars, the cutely styled Ignis radiates “fun” with its panda-like eyes and concept-car design. Its tall body on a narrow track can make it look a bit ungainly from some directions but in general it's a pretty good facsimile of Suzuki's iM-4 concept from the 2015 Geneva motor show.

Inside, a 7-inch touch screen sits prominently at the centre of the dash, featuring inbuilt satnav and a reversing camera, plus connectivity for Apple CarPlay and Android Auto. The minimalist dash design echoes the concept-car exterior, but the plastics are on the cheap side, while the thinly padded seats become tiresome on longer journeys.

Under the hood is a 1.2-litre four-cylinder (66kW/120Nm), driving the front wheels via a five-speed manual (add $1000 for a CVT version). With combined cycle consumption of 4.7L/100km, the Ignis is among the most fuel-efficient vehicles listed here, but it's not over-endowed with power or torque, so needs to be stirred along to maintain decent momentum.

On the safety front, there's no ANCAP safety rating nor advanced features like autonomous emergency braking (AEB) or lane departure warning (LDW). However, Ignis does come with standard features that include dual front airbags; front and rear side curtain airbags; antilock brakes (ABS); electronic brake distribution (EBD); and electronic stability control (ESC).

Toyota Yaris Ascent

Category: Light car
Price: $15,390 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 5.8L/100km
Safety rating: Five-star ANCAP (2017)

A big name and the biggest seller of this group of affordable cars, the Yaris eclipses the sales of its category rivals the Kia Rio and MG MG3 combined, and then some. Popularity doesn't necessarily mean excellence, of course, but the Yaris charts a sure and steady middle ground that nails the consumer sweet spot with its combination of price, style, and features; not to mention the fact it's built by one of the most trusted brands in the business.

It's a familiar sight on our roads not just because of its best-seller status but also because the basic design has endured for a remarkable eight years now. The interior is showing its age when held up to the likes of contemporary Hyundai, Kia and Mazda offerings, with durable but not overly classy plastics and a smallish 6.1-inch colour touchscreen, that does at least include a reversing camera and Bluetooth connectivity. Power comes via a 1.3-litre four-cylinder (63kW/120Nm), which drives through a five-speed manual to deliver a combined cycle average of 5.8L/100km.

Skoda Fabia 70 TSi

Category: Light car
Price: $16,890 (MRRP)
Warranty: 5 years/unlimited
Fuel consumption: 4.5L/100km
Safety rating: 5-star ANCAP (2015)

The only European brand to make our list of Australia's top 10 cheap cars, the Czech-built Fabia is closely related to its corporate cousin the Volkswagen Polo. It comes in hatch and wagon body styles but at this price it's the former only.

The Skoda Fabia 70 TSi is packed with personality, with a plucky 1.0-litre turbocharged three-cylinder (70kW/160Nm), driving through a five-speed manual transmission. Fuel consumption is an impressive 4.5L/100km, but the smooth and refined engine drinks only 95RON or better. It's a comfortable drive with polished road manners and handling, along with decent weighting to its steering and major controls.

Skodas are renowned for including satisfying surprise and delight features that owners find helpful and the Fabia is no different with nice touches like an umbrella under the front passenger seat and a mobile phone holder incorporated into the cupholder. The Fabia's comprehensive list of standard features include a 6.5-inch touch screen with rear-view camera, Bluetooth phone and audio streaming, smartphone connectivity for Apple CarPlay and Android Auto, and rear park distance sensors.

Safety features include dual front, side chest and side head airbags (curtains); electronic brake distribution (EBD); emergency brake assist (EBA); and hill start assist (HSC). Adaptive cruise control and autonomous emergency braking (AEB) are other standout standard features.