Who says you need deep pockets for a posh car? 2025 has brought us some absolute bargains in the under-£40k bracket.
Car makers seem to have finally cracked the code of making affordable cars that don't feel, well, affordable.
We're seeing entry-level models decked out with the kind of tech and trim that used to be reserved for their flagship cars.
Think plush interiors that wouldn't look out of place in a luxury showroom, smart screens that actually do what you want them to, and the sort of build quality that makes you double-check the price tag.
The really clever bit? These cars don't just look fancy - they feel properly premium to drive. Whether you're after a swish electric runabout or a hybrid that turns heads, there's something that'll make your driveway look more expensive than it really is.
We've had our team of petrolheads (and EV enthusiasts) scouring the market for the best new cars under £40,000 that punch well above their weight. These aren't just basic models with a bit of chrome slapped on - they're proper grown-up cars that feel special every time you get behind the wheel.
Want to see which cars made our experts' jaws drop this year?
Best new cars for under £40,000
Toyota CHR Hatchback
Retail Price: £45,040.00
Savings: £9,789.00
Motorfinity Price: £35,251.00
Specific trim: 2.0 PHEV GR Sport 5dr CVT [Safety Pack]
Make an Enquiry
The Toyota C-HR 2.0 PHEV GR Sport tackles the common gripes with sub-£40k cars while adding proper sporting flair.
The plug-in hybrid setup combines petrol and electric power for 223bhp total - giving you hot hatch performance when you want it, while managing up to 62 miles of pure electric running.
Perfect for mixing daily commutes with weekend fun.
Why this spec? It adds proper sporting touches without losing the luxury. It includes 20-inch alloy wheels and GR Sport body styling, body-hugging sports seats with GR badges, unique black exterior trim details, sportier suspension setup for sharper handling and much more making it an amazing choice in the segment.
Volkswagen Tiguan
Retail Price: £45,505.00
Savings: £6,509.00
Motorfinity Price: £38,996.00
Specific trim: 1.5 Tsi Ehybrid R-line 5dr Dsg
Make an Enquiry
This new 2025 Tiguan R-Line deserves the spot in this list as it sorts the common family SUV niggles rather nicely.
Our recommended trim The 1.5 TSI eHybrid (150bhp) with its clever DSG gearbox is properly refined for daily duties whilst managing about 46mpg in real driving. It's like a posh German restaurant's spag bol - familiar but done really well.
Why this spec? The R-Line gets you the sporty bits that make it look more special - those 20-inch alloys, body kit and those rather comfy sports seats inside.
Toyota Prius Hatchback
Retail Price: £37,315.00
Savings: £4,935.00
Motorfinity Price: £32,380.00
Specific trim: 2.0 PHEV Design 5dr CVT.
Make an Enquiry
The new Prius is finally a hybrid you might want rather than just need.
Our recommended variant is the 2.0-litre PHEV setup (223bhp combined) gives it proper poke - hitting 0-62mph in 6.8 seconds - while still managing an impressive 53 miles of pure electric running.
It's Toyota's Android phone moment - now as desirable as it is sensible.
Why this Design spec? It hits the sweet spot with 17-inch aero wheels (better for ride comfort than the Excel's 19-inchers), keyless entry, and adaptive cruise control.
The high-mounted driver display means less eyes-off-road time, and Toyota's kept proper buttons for the climate controls - none of that fancy touch-panel nonsense.
Lexus Es Saloon
Retail Price: £42,595.00
Savings: £6,185.00
Motorfinity Price: £36,410.00
Specific Trim: Lexus UX Premium 300h 2.5 Premium 4dr CVT
Make an Enquiry
This ES Premium does luxury differently from the German crowd. The 2.5-litre hybrid setup (176bhp) is more focused on smooth sailing than speed - taking 8.9 seconds to 62mph, but delivering over 50mpg in real driving without ever needing to faff about with plugs.
Why this Premium trim? It's Lexus being sensible - you get all the proper luxury bits without paying for bells and whistles you'll never use.
There's dual-zone climate control, adaptive cruise, electric seats that are properly comfy, and a nice big sunroof.
The 12.3-inch screen handles Apple/Android phones nicely, and those parking sensors and cameras make it a doddle to park despite its size.
Volkswagen Golf Gte E-Hybrid
Retail Price: £40,330.00
Savings: £4,049.00
Motorfinity Price: £36,281.00
Specific Trim: 1.5 TSI 272 GTE eHybrid 5dr DSG
Make an Enquiry
The other in our list is the Volkswagen Golf GTE hybrid. It delivers proper GTI thrills with a green twist.
It packs 242bhp from its clever petrol-electric combo, it's quick when you want it and efficient when you need it.
You'll get about 30 real-world electric miles - perfect for daily commutes.
You get all the good bits: sporty tartan seats, proper hot hatch styling, and a premium cabin that's built to last.
The tech's bang up to date with a 10-inch screen and full smartphone connectivity. Plus, those GTI styling touches mean it looks special on your driveway.
Ford Explorer Hybrid
Specific Trim: 125kw Select 52kwh 5dr Auto.
Make an Enquiry
The Ford Explorer redefines what you can expect from an electric SUV under £40k.
It nails the basics - managing over 300 real-world miles on a charge - while adding proper premium touches that make every journey special.
Our recommended Select trim is the sweet spot - you get everything you need and nothing you don't. The massaging driver's seat and heated wheel come standard (usually costly extras), while keyless entry means no fumbling for keys.
Plus that impressive range means you can tackle longer trips without range anxiety.
For under £40k, you're getting premium car features, genuine long-distance capability, and engaging handling - it's a genuine all-rounder that makes electric motoring both easy and enjoyable.
Cupra Tavascan
Specific Trim: 210kW V1 77kWh 5dr Auto
Make an Enquiry
The Cupra Tavascan V1 at £47,340 proves electric SUVs can be both stylish and sensible.
This entry-level trim with its 282bhp rear-wheel drive setup nails the essentials - managing an impressive 353 miles on a charge and hitting 62mph in 6.8 seconds.
It's the sweet spot in the range, offering everything you need without unnecessary extras pushing up the price.
The recommended trims comes with three-zone climate control, heated steering wheel, keyless entry, and wireless phone charging are all standard.
The massive 15-inch touchscreen is properly sharp and responsive, though you'll need to get used to those touch-sensitive controls.
The 540-litre boot beats the Kia EV6 and nearly matches the Renault Scenic.
Our expert Account Managers at Motorfinity, curated the list of vehicle models truly based on their own personal opinions of the vehicles they believe offer exceptional value for its price.
Our experts have also selected their top choices of cars under £50,000 that are quite premium despite the price tag, so don't forget to check it out.Benefits of Buying a New Car Under 40k as Compared to Used one
The 40k car bracket marks a crucial price point where mainstream excellence meets premium features.
This segment offers incredible value without hitting the premium tax bracket.
The best cars in this bracket combines strong practical features with impressive technology. Modern safety systems, hybrid powertrains, and connected tech come standard, while avoiding the higher running costs of premium brands.
Advantages of new over used in 2025
New in this price range beat the used car market due to the following reasons:
-
Latest tech without premium prices.
Today's new cars under £40k pack impressive technology that beats older premium models. Here's why:
- The new Ford Explorer delivers 374 miles of range - that's 124 miles more than used premium EVs.
- A fresh Volkswagen Golf GTE comes with tech that makes a 2-year-old Audi A3 feel dated.
- The 2025 Toyota Prius sets new efficiency standards that used hybrids can't match.
Peace of mind as standard
Buying new brings proper backup:
- Full manufacturer warranty included - no expensive add-on cover needed.
- Clear history from day one - no guessing about previous owners.
- Latest safety standards built-in.
- No hidden surprises lurking in the service history.
Money benefits.
New cars under £40k make financial sense:
- Lower monthly payments than equivalent used premium models.
- Better fuel economy for long-term savings.
- Most up-to-date safety ratings.
- More efficient charging on new EV's.
To demonstrate more consider the following example, new Ford Explorer Select at £36,995 with a two year old Audi e-tron at the same price. So this adds in:
- More range in the Explorer.
- Latest tech as standard.
- Full warranty included.
- Lower running costs.
In 2025, choosing new under £40k means getting cutting-edge features without the premium badge tax - and none of the used car uncertainties.
Motorfinity
At Motorfinity, we provide exclusive discounts on brand-new cars for our eligible audience. You can enjoy up to 32% discount on all makes and models.
Are you eligible?
Our nation’s Armed Forces, Veterans, Emergency Services, NHS, Police and Prison Services, the Education and Social Care sectors and more form our eligible audience.