The Best Sports Cars Under $40,000

• From muscle cars to tiny hatchbacks, this list proves that budget-friendly doesn't mean boring.

We should note that there aren't enough traditional sports cars to fill out the list, so we've included a few hot hatches and muscle cars too. Also, given the current market challenges we mentioned, it may not be possible to get your favorite for MSRP. But these cars are so fun that you might be willing to pay a little extra.

Chevrolet Camaro SS - $38,695

Pony cars have always been known for packing a lot of performance into an affordable price, and that tradition continues with the current crop. The Chevrolet Camaro rings in just shy of your $40,000 limit with the V8-powered SS. With 455 horsepower, a six-speed manual and sharp handling, it can make even the most mundane commute feel special. Our main gripe is the limited outward visibility, but the fun factor should outweigh that drawback for most drivers.

Ford Mustang GT - $37,480

The iconic Ford Mustang essentially started the pony car craze and delivers all the same thrills as the Camaro. In the V8-powered Mustang GT's favor, however, is a slightly lower starting price that allows shoppers to option the automatic transmission and still stay under the $40K limit. Honestly, though, it's worth learning how to drive a stick shift to get the most fun out of a Mustang. Another bonus: The outward visibility is significantly better than in the Camaro.

Dodge Challenger R/T - $37,980

The Challenger is more of a muscle car than a pony car, with a larger footprint and a narrower focus on acceleration. That means it'll be more fun at the drag strip than on a twisting racetrack. The Challenger is also more comfortable and convenient than the Camaro or Mustang. If you need four doors, by the way, the Dodge Charger is almost identical underneath.

Volkswagen GTI - $30,540

Muscle cars ushered in the big bang-for-your-buck era in the 1960s and set the stage for hot hatchbacks in the 1980s. These smaller and lighter cars maximize performance while also minimizing fuel consumption. The Volkswagen GTI is the poster child for the class and the all-new 2022 model currently sits atop the standings. We might not be fans of the infotainment interface, but the combination of 241 hp and zippy handling is a solid apology.

Honda Civic Type R - $38,910

The Honda Civic Type R was considered forbidden fruit in the U.S. for decades, until it was finally imported in 2017. With 306 horsepower and a chassis tuned for the track, the Type R is a serious performer, but it's also a rare commodity. With a redesigned Civic already on the road, and a new Type R in the works, you'll either have to hunt for a unicorn or wait for the new model.

Hyundai Veloster N - $33,525

The Hyundai Veloster N brings some funky styling to the hatchback class with its asymmetrical three-door layout. With 275 hp, it's not as powerful as the Civic Type R, but it retails for several thousand dollars less — and the real-world price gap is likely larger due to the frenzy around the Type R. You'll also have to sacrifice some ride comfort since the Veloster N rides like a shopping cart on rough roads, but this is generally not a problem for its target audience.

Mazda MX-5 Miata - $27,825

The Mazda Miata is probably the most fun car for the money. Rather than shoehorn in a big V8 engine, the Miata shaves off weight for a delightfully communicative sports car experience. It's also the only convertible that makes the list, with even the top trim coming in at under $40K.

Subaru BRZ - $27,995

The Subaru BRZ and related Toyota GR86 have been redesigned for 2022 and are currently our favorites in the coupe class. Like the Miata, they're not going to wow you with tons of power — rather, they impress with delicate balance and precise handling. They're especially fun with the cheapest tires you can find, as long as you drift responsibly, of course.

Honorable mentions

At long last, there's a new Nissan Z on the way and we expect it to start right in the $40,000 neighborhood. Also in the pipeline is a new Subaru WRX STI, and if the supporting WRX sedan is any indication, the STI may be a wonderful way to live out your rally racer fantasies. If waiting isn't an option, the rather pricey Mini John Cooper Works Hardtop 2 Door and larger Kia Stinger are worthy of consideration.

Edmunds says

Don't let a limited budget put a damper on your driving fun. These cars prove that you won't have to settle for boring.