10 New Cars Under $40,000 You'll Probably Regret Buying

If you're in the market for an affordable new car, you need to be careful when deciding what to buy. While the price tag might look like a good deal on the surface, depreciation, maintenance, and poor performance can sink your new car purchase.

That's why it's a smart money move for car owners to do their due diligence and avoid buying new vehicles that aren't worth the value. The good news? We did the research for you. Here are 10 new 2026 car models under $40,000 you'll want to avoid at all costs.

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MSRP: $27,580

Buying a 2026 Nissan Altima is a gamble on a platform that could end at any point, as Nissan previously planned to discontinue the model. While they brought it back for 2026, the writing appears to be on the wall.

With the company still plagued by CVT transmission issues, this car doesn't appear worth the hassle. With a projected depreciation rate of 49% over the first five years of ownership, consumers agree too: this car is a lemon waiting to squeeze your bank account dry.

MSRP: $29,355

The 2026 Compass is a tale of two cars. While European buyers are getting a ground-up redesign on Stellantis' new STLA Medium platform, American buyers are still stuck with the Compass's old-generation model, with the next-gen version on hold for the U.S. market.

Sluggish performance metrics make for a hard sell in an era when other car companies have closed the affordability gap. With a 5-year depreciation rate of 44%, there are better options out there for a small SUV.

MSRP: $29,995

According to iSeeCars, the Hornet had the worst dealer inventory buildup of any new vehicle in recent memory, having the highest share of leftover 2025 inventory at the end of last year — a whopping 82.1%. That market verdict is hard to ignore.

Considering its 5-year depreciation rate of 62%, it's hard to feel confident purchasing this car. Throw in previous recall issues with its backup camera, and you'll save yourself a lot of stress by staying away from the Hornet.

Dodge is discontinuing the model for 2026, so don't be fooled by the low sales prices from dealers looking to offload inventory; it may not be worth it.

MSRP: $28,145

The Maverick's low starting price is eye-catching, but the real cost of ownership tells a more complicated story. With a projected 5-year depreciation rate of 39%, the car will lose value quickly, though not as quickly as many other vehicles on the list. Still, with a tiny 4.5-foot bed, the Maverick isn't as suited for big hauling as it seems.

MSRP: $35,000

Acura's entry-level luxury SUV is essentially a Honda HR-V wearing a fancier badge and a turbocharged engine, and sluggish doesn't even begin to describe the ADX, which took 9.7 seconds to go from 0 to 60 MPH, which Consumer Reports notes is a full two seconds slower than other competitors.

You're better off just buying a standard Honda and saving a considerable amount of cash. The fancy badge isn't worth the extra money at this point.

MSRP: $26,500

As far as small SUVs go, the Taos may be one to reconsider. Persistent issues with the engine, transmission, and electrical accessories make this a tough sell even for the most ardent V-W fans. In fact, many Taos owners say they regret purchasing theirs and want to sell.

The Taos is projected to lost 54% of its value over the first five years of ownership, making resale a massive money-losing endeavor. Best to stay away and focus on other, more reliable Volkswagen models.

MSRP: $21,700

The Trax's budget-friendly price makes it a tempting first car or city runabout, but frugal shoppers should know what they're giving up. The Trax will hold just 48% of its value after five years, ranking 124th among popular vehicles in CarEdge's Cars with the Best Resale Value" study.

The redesigned third generation has earned middling reviews for its underpowered 137-hp turbocharged engine, which Consumer Reports says struggles noticeably on highway on-ramps and elevation changes. There are plenty of better and more reliable alternatives out there.

MSRP: $24,955

The Outlander Sport is one of the most frozen-in-time vehicles still on sale today. The current generation debuted in 2010 and has seen only incremental updates since.

Its 148-hp, 2.0L engine and CVT feel genuinely dated next to newer competitors, and its 22/29 mpg fuel economy is uncompetitive in a class full of 32+ mpg alternatives. The car will hold just 49% of its value after five years, ranking 118th in resale value among popular vehicles in CarEdge's study.

CarEdge notes that, as a brand, Mitsubishi ranks in the bottom quartile for value retention across virtually every time span measured. At this price, there is simply no compelling reason to choose the Outlander Sport over a Mazda CX-30 or Honda HR-V.

MSRP: $30,200

The 2026 GMC Terrain's fresh redesign can't hide its reliability problems. Consumer Reports gave the Terrain a predicted reliability score of just 17 out of 100, stripping its "Recommended" badge. Owners reported widespread problems, including drive system failures, body hardware issues, and transmission complaints.

The financial picture isn't much better: the Terrain will depreciate by 49% after five years, leaving a resale value of just $16,780 on a vehicle that starts at over $30,000.

MSRP: $37,695

Fiats are notorious for being lemons, and the all-electric 500e doesn't change the company's reputation.

The redesigned all-electric 500e looks stylish, but early specs raise concerns. Its 149-mile range is low compared to most modern EVs. Buyers face a brutal 48% five-year depreciation rate, meaning you'll lose half your investment almost immediately. It's a niche city car with a luxury price tag that simply doesn't add up.

While these 2026 models offer entry-level price tags under $40,000, their low upfront costs are often negated by rapid depreciation and high maintenance risks.

Choosing one of these vehicles could result in losing over half your investment within just five years while dealing with outdated tech or subpar reliability. Not to mention, a new car will result in higher insurance costs, making it harder to save on car insurance. Opting for more reliable alternatives, like those from Toyota or Honda, will almost certainly save you thousands of dollars in the long run.

Plus, the financial risk of buying the wrong car is higher than ever: according to JD Power, in early 2026, the number of new-vehicle buyers with negative equity on their trade-ins (meaning they owe more than the car is worth) was expected to reach 27.3%, an increase of 2.4 percentage points over the previous year.