10 Great Cars for less than $40,000

There’s no such thing as the perfect car. You determine which is the ideal car for you, and you accept the flaws that come with it.

The first step is knowing your budget and sticking to it. Having a concrete budget also acts as the perfect leverage tool at a dealership. Be aware that $40,000 is a pretty solid budget and there are plenty of really good cars you can buy, and even keep some change. It’s also a good idea to have a look at vehicles costing slightly more than $40,000 and negotiate like you mean it to get some good savings.

If you can’t find a good car for 40K, you’re not trying hard enough. Any dealer would be kicking themselves to see you walk out their door and cross the road. Remember that.

Did you know? It's usually possible to arrange car finance, such as a car loan or novated lease, before you start picking out cars if you want to have your budget set first.

Neither of these dizygotic small SUVs will disappoint in terms of quality, refinement and comfort, and they go a long way toward everyday practicality. But they're not perfect.

The powertrain and transmission you want are the 1.6L turbo-petrol engine and the seven-speed dual-clutch, which are crisp and responsive and punchy, while also being very civilised in ordinary daily driving.

But the new Kona only gets this combo in the dearer, boy-racer N-Line, and not the Highlander (anymore).

While Seltos makes it available in the mid-spec, you have to sacrifice features in order to keep the price below 40K and not get the GT-Line. This is a choice you need to make.

Just don’t get either with the 2.0L petrol and CVT transmission. It needs work. Both are easy to drive for lengthy periods, maneuverable in traffic and an ideal size for city commuters.

Both are packed with safety gear by default and there's a boot big enough to take plenty of bags, toys, small bikes and scooters. You can always add roof racks for holidays.

In terms of finance, the deals available will likely be similar whether you get Kia finance or shop for a Hyundai car loan.

Price is only one of the Picanto’s strongest credentials, it’s also a hoot to drive, and not stupidly, either. Normal people will appreciate the ‘zippy’ characteristics of a vehicle that barely weighs a tonne with you on board.

You can have a five-speed manual or four-speed auto, the two engine options are a 1.3L four-cylinder and 1.0L turbocharged petrol three-cylinder engine, which is the one you want if you know what double de-clutching means.

What you need to realise is all the short, cold starts you do with your regular car, popping up to the shops and back, nipping out to get takeaway, stop-start city traffic, taking kids to school, running around like a headless chook doing your Christmas shopping - all this short driving is serious punishment on a vehicle. Batteries, tyres, brakes, oil circulation are all wear factors on your car. A Picanto can take all this, without costing you the additional fuel you would buy simply moving a bigger heavier vehicle around.

There’s a reason CX-5 is one of the biggest volume selling vehicles in the country. It sets such a high bar, there are only a few limiting criteria that might see you look at something else, like Hyundai Tucson/Kia Sportage, RAV4, Forester/Outback or possibly new Outlander (if it’s good: TBC).

I have physically proven that everything I can fit into an Outback will equally fit into a CX-5, including a big Black Wolf tent, eski, folding chairs, luggage bags, portacot, a highchair and a pram. The difference is whether you can see out the back window: Outback, yes; CX-5, absolutely not.

As a general purpose family SUV, there’s a wide range of regular tasks CX-5 can do comfortably, with occasional towing and very light off-roading (as in, unsealed roads). Try to get the 2.5L turbo petrol engine because it’s good; offers 1800kg braked towing (150kg towball download).

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A very reliable, good-quality multi-purpose hatch or sedan with fantastic legroom, boot space and performance without getting into eye-watering cost territory.

Thanks to the reduced size compared with various SUVs, you’ll get markedly better fuel economy because it’s significantly lighter with a smaller frontal-area offering less wind resistance.

Consider the punchy 1.6 turbo-petrol GT (with brilliant 7spd dual-clutch transmission) and keep thousands of dollars while getting great performance you can actually use in your daily, public-road limited life. Don’t bother with a VW Golf, honestly.

The joy of smaller cars, not SUVs, is you can access literally everything, no matter how tall or short you are, without having to bend, climb or stretch to lift, attach or disconnect things. I’ve lived in several iterations of Cerato, as well as its i30 twin brother, and being average height, nothing is out of reach.

Installing child restraints: easy. Loading/unloading the boot: piece of cake. Passing/receiving kid stuff from the driver’s seat: entirely possible with one arm.

• Front centre airbag (fairly new safety feature on the market)
• All-wheel drive (only Subaru Impreza offers AWD small car at $40K)
• Manual transmission option (which you get on Mazda 3 or Hyundai i30)
• Hybrid powertrain option (like Toyota Corolla, or more expensive Mazda 3)

Wanna know a secret about dual-cab utes? You don’t really need 4WD. Rarely, anyway. Ask any tradie with a single-cab ute how often they get stuck.

The Triton has, for years, been the smart-money ute choice and the GLX rear-wheel drive is the perfect example of why. Every 4WD ute you see has a very heavy low-range transfer case attached to the regular transmission, which adds about 200-300kg and restricts that amount from your legal payload.

And remember, just because it rains and a dirt road turns mushy, that doesn’t mean you’re going to get stuck - not if you know how to drive using momentum. Payload is 948kg (960kg in GLX), towing capacity is 3000kg (braked, but it’s unsafe to tow that much), tray length is 1.52m, width 1.47m (1.8m between wheelarches).

There’s so much you can do with a dual-cab ute, including taking the kids to school, collecting firewood, packing for a camping trip, carrying tools and not giving a stuff if you collect sand from the beach.

• Adaptive cruise control
• LED headlights, foglights or daytime running lights
• Leather seats (probably a good thing)