Theories abound about why younger generations avoid new-car showrooms but central to the issue is this: The average price of a new car in the U.S. in 2019, according to Automotive News, was $36,851.
The implications are numerous. According to the credit agency Experian, the average loan term for a new vehicle is approaching 70 months and average payments are more than $500. That's a lot of jack for someone saddled with student loan payments and ever-increasing housing, medical, and food costs. Indeed, it's a lot for most middle-class households.
The response to that is manifold. Many young urban buyers simply don't purchase cars, relying instead on public transportation, ride-sharing, bikes, scooters, whatever. Those who simply must have one are increasingly turning to used-car lots. Last year, according to McKinsey, Americans bought a record 17.3 million new vehicles, 10.3 percent of that by fleet buyers, but used vehicle sales also soared to a new record, topping 39.4 million.
Most analysts expect that trend to continue in the short term. American manufacturers show little interest in bringing down new vehicle costs, focusing their efforts instead on higher-margin SUVs. With the elimination of the Ford Focus and Fiesta, the Fiat 500, and the Dodge Dart, Chevrolet is the only American company to still offer a car starting less than $20,000, delivery included.
Roughly 51 percent of all used vehicles sold in this country are three years old or younger. McKinsey says an abundance of off-lease vehicles is flowing into the market, which is expected to push prices down. At the same time, dealers make more money selling used vehicles than low-cost new ones. The margins are larger and back-end money is to be had from financing and extended warranty deals.
Enter the Venue
The lower end of the new-car market is now the domain of Asian makers like Hyundai. Selling in countries such as India, Korea, Australia, and Mexico gives them the volumes to achieve economies of scale and manufacturing efficiencies.
Hyundai last year rolled out the Venue, a subcompact SUV, and immediately made a dent in those markets. It was well-received by the Asian automotive press. For good reason.
Roomy, sophisticated, and built a little higher to provide that desirable SUV driver vision viewpoint and to deal with roads better equipped for horse-drawn carts, it was an immediate winner.
Hyundai took the same car and - seeking first-time buyers and hoping to build brand loyalty - upscaled it for the American market, putting in a larger engine and a ton of desirable tech, safety, and entertainment features. Starting price: $17,350.
It's an altogether pleasant vehicle, with niceties such as cruise control, Android and iPhone Bluetooth connectivity, an 8-inch center display, lane-keep assist, rear camera, steering-wheel controls, forward collision-avoidance with pedestrian detection, keyless entry, tilt and telescoping wheel, automatic headlights with high-beam assist, a USB fast-charge port, projector headlights.
The interior is quite pleasant. Seats are ample and, while there's plenty of plastics, it does not feel cheap. There's room in back for a couple of adults. A nice feature is that the rear seats fold down flat to create more than 31 cubic feet of volume space (that's a lot).
The Venue is enjoyable to drive. Steering is firm and braking more than adequate. The car feels larger and more expensive than it is.
With a 99.2-inch wheelbase, the car is as nimble as a lizard and whips smartly into parking spaces. Around town, the 1.6-Liter, 121-hp engine - backed by the best powertrain warranty in the industry - has plenty of pep. It can get into and keep up with traffic on the Interstate, but it wouldn't be our first choice for a high-speed chase.
The EPA estimates the Venue with the automatic transmission will get 30 mpg in town, 34 highway and 32 combined. The line on the manual is 27/34/30. With the automatic, we averaged 27.5 mpg in 200 miles of combined driving.
Pick the right one
No one under 30 would buy a base SE because it comes with a six-speed manual transmission. An automatic variable transmission adds $1,200.
We would strongly recommend moving up to the SEL model ($19,250) because it includes rear disc brakes - a must - driver select mode, roof side rails, automatic temperature control, auto-up driver window, a second USB port, and a quite lovely six-speaker sound system.
The top of the line is the Denim, which has all kinds of goodies, such as a power sunroof, LED lights, blind-spot and rear cross-traffic warnings and an 8-inch display. It sells for $22,050.
Here's a hint. If you want all those, take the SEL, order all the upgrade packages and save $100.
Bottom line
With a 5-year, 60,000-mile basic warranty and 10-year, 100,000-mile powertrain warranty, the value-rich Hyundai Venue sure looks like a smart alternative to a used car.