New car prices continue to climb, with the average transaction price in America now sitting well above $50,000. Many automakers argue that spending more on an electric vehicle is the smartest long-term financial decision, claiming that lower running costs eventually offset the higher purchase price.

The Toyota Corolla challenges that narrative. Starting at just over $23,000, the compact car remains one of the cheapest new vehicles on sale while also delivering exceptional reliability, strong resale values, affordable maintenance, and impressive fuel economy. Even before factoring in long-term ownership costs, it makes a compelling case against more expensive electric alternatives.

While EVs certainly have their advantages, the numbers suggest that simple, efficient gas-powered cars still have plenty of life left in them. For buyers focused purely on keeping costs low, Toyota’s compact sedan and hatchback continue to set a benchmark that many electric models struggle to match.

The Toyota Corolla is one of the most affordable new cars in 2026

Plenty affordable up front

New car prices are constantly rising, with the average new car purchase in the United States now well over the $50,000 mark. Plenty of automakers have been claiming that a solution to this affordability issue is to spend more on an EV up front to save yourself money in the long run. However, the Toyota Corolla shatters that idea, with an affordable price tag up front and long-term running costs that are much easier on your bank account than most EVs.

2026 Toyota Corolla trims and pricing

Unfortunately, the sub-$20,000 car is dead in America. Even the most affordable models on the market start higher than that. The Toyota Corolla sits firmly among some of the cheapest new cars available, though, and it comes loaded with enough features to make it feel well worth the money.

Some EV automakers will claim that it is better to spend more money and get an electric car so that you save yourself some money in the long run, but even the most affordable EV is thousands more than the Toyota Corolla. The cheapest EV in 2026 is the Chevrolet Bolt, and even that demands another $4,000 over the Corolla.

Which trim should you get?

If you’re looking to maximize the amount of equipment that you get for your money, we would opt for the SE hatchback. It comes with a few extra features over the base sedan, including a sportier suspension tune and paddle shifters, though the paddles feel a bit odd in a car like this. While the SE sedan does come with larger, fancier wheels and a little more legroom in the back, we prefer the extra cargo space that the hatch offers.

The ownership costs for a Toyota Corolla make an EV hard to justify

Toyota’s little hatch is impressively frugal

Credit: Toyota

The Corolla isn’t just about upfront savings, though. Toyota’s whole goal with this nameplate is to make it as affordable and stress-free as possible, and we think the current iteration definitely succeeds. While EVs obviously save you money on gas, in just about every other metric, Toyota’s compact car comes out cheaper.

Toyota Corolla cost of ownership

• Average annual insurance costs: $2,642
• Average 10-year maintenance costs: $4,198
• Average depreciation over 5 years: 23%

Above are some of the largest and most obvious costs of ownership, as sourced from CarEdge. In most metrics, the Corolla incurs much lower costs than most other cars on the road, whether they’re powered by gasoline or electricity.

In terms of insurance, CarEdge estimates that the Corolla will cost you $238 more per year than the average car. However, electric cars are generally much more expensive to insure than the average car.

Electric automakers will claim that you will spend much less on maintenance in the long run compared to gas-powered cars, but CarEdge estimates that the Corolla is just as affordable to keep running. Based on their estimates, there are only four other models that have lower maintenance costs over ten years.

An area where you recoup a lot of your money by sticking with the Corolla instead of an EV is depreciation. It is one of the biggest hidden costs, and one that owners don’t consider as much as they should. Where the average car loses around 50 percent of its value in five years, the Corolla’s resale is much higher. Also worth noting is the fact that most EVs depreciate much more than average.

You still have to pay for gas, but the Corolla is still pretty thrifty

Its economical setup means your gas bill is still kept low

Credit: Toyota

Obviously, the main reason that you would swap to an EV is that you can stop paying for gas. However, with the higher purchase prices, higher insurance rates, and much sharper rates of depreciation, gas savings alone don’t justify an electric car. What makes the justification even harder is that the Corolla is impressively light on fuel.

2026 Toyota Corolla performance specs

Base Trim Engine

2.0-liter 4-cylinder

Base Trim Transmission

CVT

Base Trim Drivetrain

Front-Wheel Drive

Base Trim Horsepower

169 HP @6600 RPM

Base Trim Torque

151 lb.-ft. @ 4400 RPM

Make

Toyota

Model

Corolla Sedan

Segment

Compact Sedan

The Corolla comes as either a hybrid or a non-hybrid. The non-hybrid is obviously the more affordable choice, coming with a two-liter, four-cylinder engine under the hood. It makes 169 horsepower, which it sends exclusively to the front wheels via a CVT. The sedan can be had with a hybrid setup instead, which doesn’t make as much power but is much lighter on fuel. Hybrid models can also be equipped with all-wheel drive.

Fuel economy

The EPA estimates that the average new car manages 28 miles per gallon combined. Whether you opt for the hybrid or the non-hybrid Corolla, you get much more than that. The hybrid model isn’t all that much more expensive than the non-hybrid either, with the base LE hybrid only being $1,850 more than the non-hybrid LE.

The EPA estimates that the average annual fuel cost for the thriftiest hybrid model is around $1,250. The non-hybrid is a little more, sitting at an average of $1,800. Even when you factor fuel costs in, the Corolla is still cheaper to own than a lot of EVs in the long run.

Toyota delivers real savings that make EVs hard to justify

For as long as it has been around, the Toyota Corolla has been the safe, affordable option. The nameplate promises strong reliability and low ownership costs. In recent times, manufacturers of electric vehicles have claimed that spending more on an EV will actually save you money in the long run, as there is less to maintain, and you don’t have to pay for fuel. However, when you look at real world estimates, the Corolla still comes out ahead, even if you stick to good old fashioned internal combustion, proving that new technology doesn’t always mean better.