You definitely don’t need to spend $40,000 on a new car. But, if you’re prepared to drop that kind of cash on a vehicle, you’ve come to the right place. With this kind of budget, the options open to some luxury cars and even plush SUVs. With so many options, we wanted our expert editors to put together the best cars under $40,000 so you get the most bang for your buck.
(Note: Though all the vehicles listed here have a base manufacturer’s suggested retail price that’s under $40,000, some of them offer fully loaded trim levels that can exceed this price cap.)
2021 Kia Telluride
I’m going with a somewhat unusual choice for this roundup, because I’ve recently spent a fair bit of time in Kia’s Telluride and I’ve been really, really impressed. It’s remarkably good. I think it looks remarkably good, too, though it has definitely split opinion.
The ride is on the leisurely side of comfortable, but it really is refined, lulling my passengers to sleep on multiple occasions. Meanwhile, the 3.8-liter V6 provides better-than-adequate power and the eight-speed transmission is responsive and unobtrusive, which is really all you can ask for in an automatic in a rig like this.
You can get in a front-wheel-drive Kia Telluride for $33,060 including destination, which is affordable given all it offers. Working within our $40,000 cap, I’d step up to the feature-packed EX trim, which starts at $38,460 and includes Kia’s comprehensive Highway Driving Assist system. Another $2,000 gets you AWD, then you’re just slightly over the $40,000 mark for a big, comfortable SUV that’s as sophisticated to drive as it is to look at.
— Tim Stevens
2021 Toyota Avalon
I tend to like small, sporty cars. The 2020 Toyota Avalon is neither of those things, so why am I recommending it? Because it’s a fabulously well-done large sedan that’s an epic long-distance cruiser. Its looks may not be for everyone, but there’s no denying its buttery-smooth powertrain and class-above cabin that are among its many strong points.
A 3.5-liter gas V6 comes standard with 301 horsepower and 267 pound-feet of torque, offering plenty of power. An optional hybrid model with an electrically augmented 2.5-liter four-cylinder is available for about $1,000 more, but unless gas prices spike enough to make its mid-40s fuel efficiency act as a salve for its power deficit (176 horsepower, 163 pound-feet), I’d recommend sticking with the standard engine.
Pricing starts at $36,830 (including destination) for a well-equipped base XLE, with top-shelf Limited models ringing up at just over $42K before options. At that end of the spectrum, you’re looking at an Avalon sufficiently luxurious enough to make you forget all about this car’s costlier Lexus ES twin. Oh, and if that’s not enough to keep you in the Toyota showroom, know this: The Avalon has an infinitely less annoying infotainment interface, plus you can fold the rear seats down.
— Chris Paukert
2021 Volvo XC40
Subcompact luxury crossovers are oftentimes hit-or-miss affairs. Some skimp on luxury and style, while others are duds behind the wheel. Neither is true about Volvo’s XC40. If I were shopping for a small, premium SUV, it’s absolutely the one I’d buy.
The XC40 starts at $34,695 including destination, and I actually like its lowest Momentum trim the best (the same spec as). Opt for the more powerful T5 engine with all-wheel drive, choose a few option packages, and you’ve got a really nicely equipped crossover for right about $40,000. LED headlights, leather seats, a 9-inch touchscreen infotainment system and a ton of active safety equipment all come standard.
The XC40 impresses with its easygoing, comfortable driving dynamics, spacious interior and high-quality materials. It’s everything I love about Volvo’s larger, more expensive vehicles, all in a pint-sized package.
— Steven Ewing
2021 Hyundai Kona Electric
Earmarking $40K opens buyers to a new generation of entry-level EVs, and one of our favorites is Hyundai’s Kona Electric. The subcompact SUV combines generous safety and cabin tech with reasonable spaciousness, all wrapped into a city-friendly footprint and wallet-friendly budget. If you want to keep it under $40,000, you’ll have to go with the SEL trim.
The Kona’s electric motor sends 201 hp and 291 lb-ft of torque to its front wheels. That’s more get-up-and-go than the turbocharged gasoline Kona, but the heavier EV is a bit slower overall. Without gear changes or revs to build, however, the nearly silent electric SUV should feel more responsive off the line and around town.
Of course, the most important number is the Kona Electric’s 258-mile EPA-estimated range — that should quell most range anxiety concerns. At a DC Fast Charger, the EV can boost its battery to an 80% charge in about an hour. More common, 240-volt, Level 2 home and public stations can juice the battery with a 9.5-hour charge.
— Antuan Goodwin
2020 Acura RDX is a price-conscious luxury buyer’s delight
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2021 Acura RDX
The third-generation Acura RDX offered a number of improvements over its already solid predecessor. More appealing styling, a new turbocharged engine and Acura’s excellent SH-AWD system work together to make the RDX really interesting. Things are nicer inside, too, with a great layout of controls, some of the most comfortable seats in the business and a healthy list of tech offerings. With a base price of $38,825, including $1,025 for destination, it’s not a bad value for a sporty, entry-luxury crossover.
A 2.0-liter, turbocharged four-cylinder powers the RDX, producing a respectable 272 hp and 280 lb-ft of torque. The latter is available from just 1,600 rpm on up to 4,500 rpm for peppy acceleration from stops and out of corners, and works with a well-calibrated 10-speed automatic. Spring for the optional adaptive dampers and you’ll have a small crossover that can be entertaining to toss around, or comfortable for normal driving at the push of a button.
Acura’s True Touchpad Interface with a 10.2-inch center screen is in charge of infotainment, and it’s intuitive to use after a short get-to-know period. It’s offered with navigation, a 16-speaker ELS audio system, Wi-Fi hotspot, Apple CarPlay and Android Auto capabilities. For safety, forward collision warning with automatic emergency braking, adaptive cruise, lane keep assist and a multiangle rearview camera come standard.
— Jon Wong
2021 Mercedes-Benz A-Class
The A-Class is a great entry point into the Mercedes-Benz brand. This little sedan punches way above its weight with premium materials, a peppy turbocharged engine and plenty of technology.
Mercedes’ MBUX infotainment system comes on an optional 10.25-inch touchscreen, and brings natural voice recognition to the table. Plus, I love the augmented reality overlay that’s available on the navigation. It displays navigation directions directly on top of the real-time video display from the front camera, ensuring you’ll never miss a turn.
The four-cylinder turbocharged engine puts out 188 hp and 221 lb-ft of torque, which is more than adequate in the A220 sedan. A Sport mode can dial up the transmission and throttle response, while Comfort is great for daily driving. Power goes down to the front wheels through a seven-speed, dual-clutch transmission, although all-wheel drive is available for those in colder climates.
Overall, the A-Class is a truly premium car — far more so than the last-generation CLA250 ever was.
— Emme Hall
2021 Toyota RAV4
Toyota’s RAV4 has been one of the world’s best-selling small SUVs for a reason. It’s simple, stout, well-built and priced appropriately. And it looks good, too.
The drivetrain options on the 2020 RAV4 may not be the most exciting in the world, but they are efficient and shouldn’t give you many problems going forward. Optional hybrid power in a compact SUV is a great selling point, too.
The RAV4, particularly in Adventure trim, is a handsome SUV that begins to look a little like its more off-road capable siblings without forcing those vehicles’ compromises on its owner. It’s a great crossover, and is more appealing than ever before.
— Kyle Hyatt
Read our most recent Toyota RAV4 review
2021 Audi Q3
The 2021 Audi Q3 is on sale, packing some major improvements, and I believe that’ll give this diminutive German the edge over its competitors, many of which are very compelling.
Having sampled the Q3 last year, I can attest to its prowess in the handling department. Wielding the same 228-hp turbo I4 as the Volkswagen Golf GTI, it should also provide enough hustle to back up an on-road demeanor that begs you to have a little fun behind the wheel.
The Q3’s starting price of $35,695 including destination nets you some solid standard equipment, including a 10.25-inch gauge cluster display, a panoramic sunroof, dual-zone automatic climate control, two rows of USB ports and automatic emergency braking.
— Andrew Krok