Midsize Cars Cheaper Than Their Small Cousins

August 27, 2010

Not too long ago, if you wanted a small car for the fuel economy, but wanted to be surrounded by creature comforts and enjoy the drive, you were out of luck.

All that has changed now. The new small cars reaching dealerships this summer can be equipped as borderline luxury cars, with leather upholstery, Bluetooth connectivity, impressive sound systems and a ride worthy of a luxury badge.  New small cars like the Chevy Cruze and Ford Fiesta now come equipped with luxuries we saw only on larger vehicles just a year ago.

There's only one problem with these impressive little cars: the price. With all of that content, they can cost as much as midsize cars.

In fact, several automakers have started to see their prices intersecting. There are now small cars as expensive as their midsize cousins.  And as automakers seek to recover the money they invested developing these fantastic compact cars, they are reluctant to discount them.  Yet--thanks here for help from our friends at TrueCar--they are often discounting larger cars in the same showrooms.  In some dealerships this month, you can save money by crossing the showroom floor and buying a larger car.

2011 Ford Fiesta sedan

2011 Ford Fiesta sedan

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2010 Ford Fusion

2010 Ford Fusion

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2011 Ford Fiesta vs. 2010 Ford Fusion

The stylish new Ford Fiesta is a triumph.  It combines a sophisticated look with sharp handling, and upscale features like leather seats and Ford's SYNC infotainment interface, making it one of the most appealing small cars America has seen in many years.  Yet, that same appeal is keeping supply and demand out of sync, and Ford has already had to tell some who paid to reserve a Fiesta that their car will be late.  The little compact is selling at full price in most cases, approaching $20,000 fully equipped.

Yet the Fusion starts at under $20,000, and this month, is offered with a $2,000 cash back rebate.  That makes many four-cylinder Fusions, even equipped with SYNC, less expensive than the much smaller Fiesta with similar equipment. Fusion buyers get more space, of course, but also respectable fuel economy and handsome styling.

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