Best Cars Under $40K

As sporty coupes go, there's nothing quite like the Mini Cooper. It has one-of-a-kind styling inside and out and performance that makes it a thrill to drive. Fully redesigned this year, the 2025 Mini Hardtop gets revised styling, new features, and an upgraded cabin with a more premium feel.

With every new generation, Mini rolls out its new models in phases, so the two-door hardtop is the first to show off the new styling. It's still very much in tune with its predecessors, with round headlights sunken into a steeply raked front end and a two-tone roof, but new triangular taillights help distinguish it from older models.

There will be two models sold in the United States: the base Cooper hardtop and the higher-performance Cooper S hardtop. Both are powered by a 2.0-liter turbocharged four-cylinder engine that sends power to the front wheels. The Cooper S is rated at 201 horsepower, which is slightly more than the previous version. Mini says everything about the suspension is geared toward agile handling, so sharp steering, minimal body roll, and excellent stopping power remain part of the package.

The new interior design is dominated by the 9-inch, circular touchscreen that sits front and center in the dashboard. Mini says it's the first OLED display in the industry so the readability and colors are exceptional. The rest of the interior is a mix of soft-touch materials and metallic accents that contribute to the premium feel. There's also a variety of driver-selectable "Mini experience modes" that adjust the graphics and ambient lighting in the cabin to reflect different themes.

Given the Mini's unusual characteristics, there aren't many direct competitors. The Audi A3 has similar levels of performance and luxury but a more conventional hatchback design. The BMW 2 Series is a traditional coupe with great performance, but it has a substantially higher price. Additional versions of the new Mini, such as a four-door model, are expected to follow later in the year.

Think of the 2025 Subaru Impreza like you would a waterproof jacket from Columbia Sportswear. It’s good in the rain thanks to standard all-wheel drive. It’s comfortable and straightforward. There aren’t really any frills, and the price is low considering its capability. Would you call it highly fashionable, however? Probably not. Like a Columbia jacket, the Impreza will get the job done — and there’s a good chance they’ll be found together considering their brands tend to be popular in the exact same places.

Let’s talk about the pros. All-wheel drive is not only standard, but it’s a rarity in the compact car class. The Impreza’s safety scores are also excellent, earning a perfect five stars in every category from the National Highway Traffic Safety Administration and a Top Safety Pick award from the Insurance Institute for Highway Safety. There’s also a lot to be said for its no-nonsense interior with its familiar controls, durable materials, and lack of trying-too-hard doo-dads.

Now, the drawbacks. That no-nonsense interior could just as easily be seen as dowdy or dated. The Impreza is pretty boring to drive (yes, even the kinda-sporty-ish RS), which you may not care about, but there’s still a good chance you’ll find the base engine’s acceleration to be underwhelming. Its fuel economy also leaves something to be desired, and there’s no Impreza Hybrid. The Honda Civic, Hyundai Elantra, and Toyota Corolla all offer hybrids, though only the Civic is available as a hatchback model.

Being a hatchback can be considered a plus. But if you’ve got a little more budget, the Subaru Crosstrek is really just an Impreza with a lifted suspension, more rugged looks, roof rails, and greater capability. It also doesn’t have the same sensible-shoes vibe, while boasting the same list of pros. There’s definitely a reason it’s more popular, but if you don’t care about automotive fashion, have no intention of taking your car off-road (or even appearing like you will), and just want your car to work well and be easy to use, the 2025 Subaru Impreza is a trusty, no-nonsense companion.

Like generations before, the 2025 Ford Mustang adheres to a straightforward formula: big engine, rear-wheel drive, and attainable price tag. The rest pretty much takes care of itself. Ford issued a new version of the Mustang in 2024, called the S650 internally, and it returns for the 2025 model year mostly unchanged. Up front, you get either a turbocharged four-cylinder engine or a big V8. You can get convertible versions and fastback coupe versions. And you can also get high-performance versions, called Dark Horse, with serious power.

Base versions of the 2025 Mustang start in the low-$30,000 range, making this an attractive proposition for budget-friendly folks who still want fun to come standard. Of course, nostalgia is paramount. The Mustang was the original "pony car," debuting in 1964 and followed shortly after by competition from the Chevrolet Camaro and Dodge Challenger. Today, the Camaro and Challenger have been canceled, leaving the Mustang the only American pony car still available.

And its stable keeps growing — new for 2025; there's a 60th Anniversary Edition model in a revived blue paint color with extra body graphics and equipment. There's also an 800-horsepower supercar version called the Mustang GTD, though it isn't reviewed here because it's practically a different vehicle altogether.

Today, the Mustang has a modern and comfortable interior. The back seat is still small, but it has comfortable seats and a smooth, calm demeanor on the highway. The technology is also good, with vivid and responsive screens to control its many functions. That nod toward the future, while still clearly influenced by the past, continues to draw new customers to the Mustang each year.

While it may seem like SUVs have taken over the automotive landscape, offering maximum utility to families of all sizes, there are still several midsize sedans available with style, value, and plenty of comfort. The 2025 Honda Accord is one such sedan, a stalwart of the segment that’s stayed at or near the top of its class for decades.

The current Honda Accord is offered in two main configurations, each using a different powertrain. The base engine is a turbocharged 1.5-liter four-cylinder that’s economical and peppy enough for most daily driving needs. The Accord hybrid uses a 2.0-liter engine paired with an electric motor and provides a big increase in fuel economy – as high as 48 mpg combined, according to the EPA. Regardless of which powertrain you choose, the Accord has a spacious interior, plenty of trunk space, and a quiet, refined ride. It also has top safety scores from government agencies, along with a long list of standard driver aids.

The Accord isn’t the only appealing midsize sedan, though. The Toyota Camry has recently gone all-hybrid, offering a number of trims with impressive fuel economy and Toyota’s built-in reputation for reliability. The Camry is also offered with all-wheel drive, unlike the Accord. Other rivals worth considering include the Kia K5 and Hyundai Sonata, which both offer powerful optional engines, and the Nissan Altima, which has competitive pricing and some of the most comfortable seats in the class.

Like the Toyota Prius it’s based on, the 2024 Toyota Prius Prime plug-in hybrid (PHEV) had an identity that seemed set in stone. Both cars were hailed far and wide for being the ones to beat if you want excellent fuel economy. But they were also notorious for having drab styling and sluggish acceleration.

Last year, Toyota flipped the script by giving both cars a monumental redesign, giving the Prius Prime the kind of makeover overlooked wallflowers dream about. The plain-jane exterior is gone, replaced by sleek, sporty styling. The cabin got ergonomic upgrades and a fresh new look, and Toyota rolled out improvements in range, efficiency, and potency.

Able to travel more than 80 miles on electricity alone with a fully charged battery, the Prius Prime is a leader among PHEVs. It can travel farther on electric power than rivals such as the Kia Niro PHEV and Mini Countryman Cooper SE PHEV. And the fuel economy is stellar. Toyota estimates the Prius Prime will return 52 mpg in combined city and highway driving when in hybrid mode, making it a more efficient choice than the Niro PHEV.

Lastly, there’s the matter of horsepower. With 220 horses under its hood, the Prius Prime is one of the most potent picks in its class, delivering quick acceleration. It has more horsepower than the Niro PHEV and is neck-and-neck in output with the lively Countryman Cooper PHEV.

In the deficit column, the Prius Prime has tight rear seats and less maximum cargo capacity than other models in this class. But it wins the award for Most Improved and is hard to top if you want a stylish, quick, and efficient plug-in hybrid car.

Hyundai's Ioniq 6 electric sedan picked up steam in 2024, and the company has decided to leave a good thing virtually unchanged for 2025. The streamlined, midsize four-door offers an alternative to SUVs and boxy crossovers, along with a range — up to 342 miles in front-wheel-drive models — that few competitors in its reasonable price range can match.

The Ioniq 6 shares its platform and powertrain with the Hyundai Ioniq 5 electric crossover, but its styling cuts down on interior space, especially in the rear seating area. Cargo capacity is lower than in the boxy, SUV-styled Ioniq 5 as well.

Sedans have fallen out of favor in the U.S., so the Ioniq 6 has few direct rivals. Competition includes the Tesla Model 3 sedan, Ford Mustang Mach-E coupe-like crossover, Polestar 2 hatchback sedan, and BMW i4 sedan. Overall, the Ioniq 6 is longer than any other electric sedan in its price range, and only the wider and taller Mach-E has more total passenger space. The Hyundai also falls short in cargo space and horsepower but still has plenty of oomph and a more comfortable, composed ride than most of the competition.

The only other drawback is that as a Korean-built car, the Ioniq 6 doesn't qualify for a federal income tax credit while the Mustang Mach-E and Model 3, its two North American-built competitors, do. That means both cost less when the tax credit is applied. Other potential rivals cost more and, like the Hyundai, don't qualify for the federal tax credit because they are built overseas.

The Subaru WRX has been a mainstay among high-performance compact cars for years. It offers the practicality of standard all-wheel drive, a slick-shifting manual transmission, and engaging driving dynamics. Under the hood of this sporty sedan is a turbocharged 2.0-liter engine that produces 271 horsepower – enough to make the WRX feel quick, even if it does lag behind class leaders like the Honda Civic Type R and the Volkswagen Golf R. Unfortunately, the WRX’s fuel economy also is well below that of performance rivals like the aforementioned Civic Type R and Golf R, as well as the Toyota GR Corolla and the Hyundai Elantra N.

For 2025, the WRX gets a new trim level, the tS, which stands for "tuned by STI." On previous WRX models, the STI trim has come with a significant power increase, along with hardcore performance parts. With the tS, things are a bit less extreme. It gets the same 271-horsepower engine, but it includes features like Recaro sport seats, big Brembo brakes, a new 12.3-inch digital gauge cluster, and adaptive suspension dampers. STI enthusiasts will surely bemoan the lack of a higher-horsepower engine, but we still expect plenty of driving thrills from the tS. Despite its drawbacks, the 2025 Subaru WRX remains a performance bargain, offering a sporty driving experience and a well-equipped interior for the money.

Toyota hasn't made many changes to the 2025 GR86. And it shouldn't. Sure, there's a new Hakone Edition which actually isn't new at all (it was in the lineup a few years back). But this snappy rear-wheel-drive sports car remains what it should be: A place for purists to invest in honest, cheap fun.

How do we know Toyota is serious about the GR86 being a real sports car? Well, a good place to start is the rear differential: Every single GR86 sold has a Torsen limited-slip out back, a sure sign that even though it's not a powerhouse, it's meant to be driven hard. The Premium and Hakone Edition both come with Michelin Pilot Sport 4 tires, which are among the best performing summer tires available. The 2.4-liter flat four is good for 228 horsepower and you can choose between a six-speed manual or automatic transmission. There's a quick 13.5:1 steering ratio and Brembo brake calipers are offered with the performance package (they're standard on Hakone Edition). This is a laundry list of purposefully designed performance parts you'll find on few other cars, and it's all packed into a feathery-by-today's-standards 2,811-pound package.

What's more, every GR86 purchase includes a one-year membership into the National Auto Sport Association and free track day. And Toyota won't void your warranty for it!

At first glance, paying 40 grand for a 2025 Audi A3, a sedan that’s smaller than a Honda Civic, may seem like a questionable choice. From a sheer “on paper” perspective, it’s going to be hard to justify, especially when you consider you can also get an even bigger, non-luxury sedan for less money. Bang for your buck? Probably not finding it in the traditional sense with the A3.

Yet, there’s more to choosing a car than simply sizing choices up on a spreadsheet. It’s impossible to quantify the way the interior looks, smells, and feels. The way the buttons and, in the case of the A3, touchscreen click when you press them. The higher standards of fit and finish, both inside and outside. There’s also the quieter cabin, the more sophisticated ride and handling balance, and although it does show up on a spreadsheet, the higher standard power output. In other words, you have to see, sit, and drive it to believe it.

Maybe it still won’t add up to a good choice, but there’s definitely plenty of reasons to go with a small luxury sedan like the A3 — especially if you value the benefits of a small car. Its compact dimensions make it easier to park and more agile to drive, while the now-standard all-wheel drive provides ample traction in poor weather or if you just feel like taking a fun drive on a back road. The downside is, not surprisingly, a back seat that won’t be friendly for all and quite a small trunk.

The A3 is not alone in this small luxury sedan arena, however. The BMW 2 Series Gran Coupe and Mercedes-Benz CLA are even pricier than the A3, and although they are more powerful, they don’t come standard with all-wheel drive and have fewer standard features. As such, we think the A3 is a better choice than those. On the other end of the spectrum, the Acura Integra boasts similar power and a larger interior (thanks to being based on the Honda Civic) for less money, though it also includes fewer standard features. It’s probably the strongest alternative to the A3, but if you’re looking in this aisle, checking out Audi’s smallest offering is a must.

From a brand known more for wagons and rally cars, the 2025 Subaru BRZ is an oddball. A lightweight, two-door performance coupe with a long hood, rear-wheel drive, and a standard manual transmission, the BRZ is a throwback in an age of EVs and SUVs. But like most models in Subaru's portfolio, the BRZ has found its tribe. Driving enthusiasts who crave small, swift, and agile cars with just-enough power have helped keep the BRZ around for 12 years.

Nothing much changes for 2025 after last year's introduction of the tS performance trim. Touched by Subaru's in-house hot rod shop, STI (Subaru Technica International), the tS offers a track-ready suspension and Brembo brakes to get amateur racers a step closer to their goal. Despite rumors of a turbocharged engine option, the BRZ continues with its 228-horsepower four-cylinder engine. That's modest power by today's standards, but the BRZ's modest mass — only about 2,800 pounds — means less weight to throw around and sharper handling.

Not surprisingly, the BRZ is a blast to drive, especially when equipped with the precise six-speed manual transmission. A responsive six-speed automatic is also available on the Limited trim. The suspension is firm, but remains comfortable enough for everyday use. Inside, the BRZ's back seat, or what passes for one anyway, is too small for passengers and is best suited to extra storage.

The BRZ was co-developed with Toyota and it's a visual and mechanical twin to the Toyota GR86. Both are powered by the same Subaru four-cylinder engine; only the styling and suspension settings are different. Although essentially the same car, the Toyota is the BRZ's only true competitor. The long-running Mazda MX-5 Miata is another small car made for zesty driving. It makes less power and only has two seats, but it's just as responsive and offers a convertible top.

Almost every type of vehicle has gotten quite a bit larger over the years. That's great for family vehicles that benefit from the added interior space, but weight and a larger footprint are drawbacks for a sporty and fun coupe or sedan. Thankfully, there are still a few compact alternatives with the kind of excitement that enthusiasts desire.

The 2024 BMW 2 Series is a prime example, and it's offered in two different body styles. The traditional 2 Series coupe is the sportiest, while the four-door 2 Series Gran Coupe adds some practicality. Both are available with the choice of two engines and all-wheel drive. Power is plentiful from both models, and as expected, prices rise along with performance.

Both 2 Series variants benefit from a refined interior that is comparable to more expensive BMW models. The 2 Series coupe has an aesthetic advantage for its modern curved glass display screen, but the Gran Coupe's infotainment system is just as easy to use.

There aren't many direct rivals to the BMW 2 Series, though, and the closest competitors are all sedans. The Audi A3 is worth comparing against the BMW's lower trim levels, while the S3 is a challenger to the top M240i coupe. The Mercedes-Benz CLA is more of an entry-level luxury choice, but there are some sportier AMG variants to get your blood pumping. The BMW 2 Series is the most spirited of the bunch.