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If you’re looking for a new car that won’t break the bank, then you’re in luck! In this guide, we’ve put together a list of the best new cars under £20,000. Our top 10 affordable new vehicles feature compact city runners like the Fiat 500 to practical family-sized cars like the Dacia Sandero Stepway.
Finding a new car that delivers quality, features, and reliability for under £20,000 might seem like a tall order, but it is far from impossible as we prove in this article. The good news is that manufacturers like Dacia are revolutionising the budget car market with incredible value-for-money models and MG is making waves with their feature-packed affordable cars that are selling like hotcakes!
We’ll also explain how established brands like Renault, Peugeot, and Hyundai are bringing premium driving experiences to a more accessible price point - that’s great news for the everyday driver! We even feature some exciting new models being introduced to the UK market, like the Leapmotor T03, an electric vehicle that is making zero-emission motoring more affordable than ever before…
Starting from £16,605 | Insurance Group: 6-20 | Fuel Economy: up to 56.5 mpg
The Citroën C3 Aircross is a somewhat quirky-looking car that proves an affordable SUV is possible without compromising on space for the family or pet pooch! If you’re a driver who prefers a higher driving position, then the C3 Aircross certainly ticks that box. What's more, the interior is flexible and spacious enough to accommodate that weekend trip away with friends or that overdue trip to IKEA.
We particularly like the low-cost servicing plans that start from just £15.99 per month, the efficient range of engine choices to keep running costs down, and the group 6 insurance rating on entry models, which is ideal for young drivers.
Inspired by Citroën's commercial vehicles, the manufacturer offers a range of specially-made sunblinds for the C3 Aircross model’s rear door windows and rear screen. These can be fixed in place to protect passengers from the sun’s rays and limit the temperature inside during the warm summer months.
Sandero from £13,225 | Stepway from £14,200 | Insurance Group: 2-12 | Fuel Economy: up to 53.3 mpg
Officially crowned “the UK's cheapest new car”, the latest Dacia Sandero feels far from a budget option anymore. The family-sized car offers exceptional value for money if you’re watching your spending, while the Dacia Sandero Stepway variant adds the desired SUV styling without breaking the bank. If one thing’s for sure, the Sandero has revolutionised the budget car segment, offering incredible value without feeling cheap.
We love the fact that the Dacia Sandero has the lowest starting price of any new car in the UK - there are some cracking PCP finance deals to be had on this little gem! For new drivers, low insurance groups make it an ideal purchase and the manufacturer’s comprehensive 3-year/60,000-mile warranty is certainly a huge selling point.
The Dacia Sandero model is so popular in Europe that it outsold the Volkswagen Golf in 2022 to become Europe's best-selling car - who would’ve thought!
From £14,240 | Insurance Group: 24-25 | Range: up to 140 miles | Charging: 0-80% in 45 minutes (with a rapid charger)
When it comes to budget motoring, Dacia has certainly done their homework; Making electric mobility accessible to all, the Dacia Spring is currently the UK's most affordable new electric car. If you’re looking for zero-emissions driving on a budget, then you’ll be hard-pressed to find a better car than the Spring - just don’t expect to drive long distances in one go!
As a fully electric car, the Dacia Spring is compliant with zero emissions zones, such as London’s Congestion Charge and ULEZ. If you’re a regular traveller to and from the city, these savings can really add up! Then there’s the fuel costs - or lack of - to consider, which can potentially save you thousands of pounds a year.
The Dacia Spring was initially designed for the Chinese market under Renault's joint venture with Dongfeng before being adapted for European buyers like us!
Starting from £16,800 | Insurance Group: 10-21 | Fuel Economy: up to 57.6 mpg
Well, there’s not much not to love about the iconic Fiat 500 which continues to dominate the city car market with its sought-after compact size and affordable price point. With its retro-inspired looks and contemporary features, the Fiat 500 is an ideal choice for style-conscious buyers on a budget. Now available in a mild hybrid option, the miniature motor boasts its retro-inspired design as a standard hatchback option or soft-top convertible.
We particularly like the addition of an efficient mild hybrid system to reduce the overall running costs, plus the mpg range of up to 57.6 helps further reduce fuel costs. Thanks to the hybrid technology, you can expect a low road tax band, plus the low insurance groups make it an ideal purchase for young drivers.
The new Fiat 500's design was partly inspired by the original 1957 Fiat 500's measurements – in fact, the design team actually traced the original car's silhouette as a starting point!
Starting from £15,380 | Insurance Group: 1-7 | Fuel Economy: up to 53.5 mpg
You know what they say, all good things come in small packages, which is exactly the case for the cutely compact Hyundai i10. Despite its size, this city run-around doesn’t compromise on driving quality or onboard features - it still packs a big punch where performance is concerned! The latest generation i10 showcases Hyundai's commitment to raising the bar in the small car segment and proves to be a fantastically affordable first purchase for drivers young or old.
Benefit from a low insurance group - great for younger drivers looking to keep costs down. In addition, we really like the range of efficient engine choices that will mean you’ll spend less at the fuel pumps. Plus, thanks to a strong reliability record, it could mean potential repair costs are kept to a minimum.
The latest i10 was specifically designed and developed in Europe for European tastes, with its chassis tuned on German roads - including the iconic Nürburgring circuit!
Starting from £15,995 | Insurance Group: TBC | Range: up to 165 miles
Now, here’s a bit of a curveball for our top 10 list - a brand-new model! Introducing China’s Leapmotor T03 which, along with its sister models, forms a new wave of affordable electric vehicles hitting UK shores. Proving that sophisticated EV technology doesn't have to come with a premium price tag, the T03 is an ideal budget purchase for forward-thinking buyers seeking zero-emission motoring at a reasonable price. And do you know what? We quite like it!
As a fully electric car, the Leapmotor T03 costs nothing in road tax and is of course exempt from low emission zones charges, such as London’s ULEZ. Not only do battery-powered vehicles like this have lower servicing costs than those with conventional combustion engines, but the running costs are super low too!
Leapmotor is one of the few automotive companies globally that develops its own chips and operating system in-house, giving them unique control over their vehicles' technology integration and performance capabilities!
Starting from £18,495 | Insurance Group: 4-8 | Fuel Economy: up to 64.2 mpg
MG is doing a lot of things right at the moment, including making electrified motoring accessible to the masses, proving that hybrid technology doesn't need to cost the earth. The MG3 Hybrid model is the perfect example of this new era for the manufacturer, which is winning drivers' hearts and minds all over the country. If you’re seeking the benefits of hybrid efficiency without the usual hybrid premium, this practical hatchback delivers impressive value in an increasingly expensive market.
There’s so much to like about the MG3, not least of all that it sits in more low-rate insurance groups, but of course, the benefit of hybrid technology also means reduced fuel consumption. Your wallet will thank you for it!
The MG3 Hybrid's development included over 1 million miles of testing in UK conditions to ensure its hybrid system was perfectly calibrated for British roads and driving styles!
Starting from £19,995 | Insurance Group: 11-28 | Fuel Economy: up to 43 mpg | Range: up to 273 miles
It probably comes as no surprise that the SUV market has been increasingly booming in the last few years, but with ever-rising prices, MG offers a budget-friendly option for growing families. As such, the MG ZS model challenges perceptions of budget SUV ownership, proving that practicality and features needn't cost an absolute fortune. We think it's a perfect solution for families and value-conscious buyers seeking maximum space and equipment for their money.
It’s refreshing to have a vehicle that not only stands out as exceptional value but is filled with practical features. Available as a petrol engine variant or fully electric vehicle, buyers will benefit from an industry-leading 7-year/80,000-mile warranty while insurance costs are pretty reasonable thanks to a lower group rating.
The MG ZS has become such a success story that it regularly outsells established rivals from premium brands in many markets, proving that buyers are increasingly prioritising value and practicality over badge prestige!
Starting from £19,480 | Insurance Group: 5-34 | Fuel Economy: up to 65.9 mpg
Now this is an affordable car worth getting excited about! The Peugeot 208 brings premium design and sophistication to the supermini segment, proving that new cars can deliver upmarket appeal without breaking the bank. Boasting premium features without the luxury price tag, this sophisticated little bundle of joy punches well above its weight in terms of design and quality. The latest generation 208 showcases Peugeot's bold new design direction and upmarket aspirations and we’re here for it!
What Peugeot does really well is create efficient PureTech engines designed to reduce fuel consumption and overall running costs. Thanks to the generous suite of comprehensive safety features included as standard, insurance costs are kept to a minimum which is good news for drivers.
The 208's distinctive 'fang' LED daytime running lights were inspired by the lion's teeth in Peugeot's iconic logo, and each light signature takes over 20 hours to program and perfect!
Starting from £17,620 | Insurance Group: 10-16 | Fuel Economy: up to 62.8 mpg
Not to be outdone by any newcomers on the scene, the Renault Clio continues its three-decade legacy of supermini excellence, proving that experience breeds excellence in the competitive small car market. As an all-rounder who excels in every area, the Clio perfectly combines style, practicality, and driving pleasure that has made it France's best-selling car for over 20 years. And guess what? We Brits love it too!
So let’s be real, while the higher-end trims can demand a more costly commitment, the entry-level models fall beneath the £20,000 mark and tick the box for low insurance group costs too. Due to strong residual values, the Renault Clio can be picked up relatively cheaply on PCP finance deals.
The Renault Clio has been France's best-selling car for 24 years running – that's longer than some of its target buyers have been alive!
The monthly car running costs table below features estimates based on 10,000 miles of driving per year :
| Model of Car : | Fuel / Charging : | Insurance : | Servicing : | Road Tax : | Monthly Total : |
| Citroën C3 Aircross | £95 | £55 | £25 | £15 | £190 |
| Dacia Sandero | £85 | £45 | £20 | £13.75 | £163.75 |
| Dacia Spring | £35 | £50 | £15 | £0 | £100 |
| Fiat 500 | £90 | £48 | £22 | £13.75 | £173.75 |
| Hyundai i10 | £90 | £50 | £25 | £13.75 | £178.75 |
| Leapmotor T03 | £40 | £55 | £15 | £0 | £110 |
| MG ZS | £100 | £52 | £20 | £15.00 | £187 |
| MG3 Hybrid | £75 | £55 | £20 | £12.08 | £162.08 |
| Peugeot 208 | £95 | £60 | £25 | £13.75 | £193.75 |
| Renault Clio | £95 | £60 | £25 | £13.75 | £193.75 |
A : Yes, you can! There are several new car options priced under £20,000, including the Dacia Sandero, Hyundai i10, Fiat 500, and MG3. Many mainstream manufacturers offer entry-level models with good specifications within this budget.
A : Newly-built budget cars are significantly safer than previous generations. Many models in our list, including the Peugeot 208 and Renault Clio, achieve the maximum 5-star Euro NCAP safety rating.
A : Yes, the Dacia Spring, MG ZS EV and Leapmotor T03 both offer all-electric motoring for under £20,000.
A : Yes, most new budget cars include features like smartphone integration, touchscreen infotainment, and safety assistance systems. The Hyundai i10 and Peugeot 208 particularly stand out for their technology offerings.
A : Yes, the MG3 Hybrid offers mild hybrid technology under £20,000, helping to reduce fuel consumption and emissions.
A : Pure electric vehicles like the Dacia Spring, MG ZS EV and Leapmotor T03 qualify for zero road tax. Most other models in this price range fall into lower tax bands thanks to efficient engines.
At Wilsons Epsom, we're committed to helping you find the perfect new car under £20,000 with a buying experience that's second to none. From the fun-loving Fiat 500 to the brand new fully electric Leapmotor T03, visit us for expert advice and to test drive any of our affordable vehicles.
Our expert team can help you compare running costs, arrange competitive car finance, and find the perfect vehicle to meet your requirements within budget.