Australia's best small cars

In 2011 there was a seismic shift in the Australian car market - the Holden Commodore was dethroned as this country’s favourite car by the Mazda3.

It marked the zenith for small cars, emerging from the ‘cheap and cheerful’ image they’d been tarnished with, and instead proving small cars could have big appeal.

In 2011 there were a whopping 36 small cars to choose from, as diverse as the big name Mazda3 and Toyota Corolla all the way to forgettable Dodge Caliber and Renault Fluence. More than 244,000 new small cars sold that year, which represented more than twice as many as the next largest market segment.

Fast forward to 2025 and small cars have declined in popularity but are still a major part of the Australia new car industry. There were 25 small car options in 2024, but the majority of those are now in the ‘over $40K’ part of the market, as small cars become increasingly expensive.

This is down to several factors, with small cars becoming more spacious, more premium and several electric-only models.

Thanks to this diversity small car sales were up 10.2 per cent in 2024, with the Toyota Corolla leading the charge. The small car market was the biggest passenger car segment in ‘24, but did finish behind Utes, Medium SUVs, Small SUVs and Large SUVs.

In this article we’ll give you a guide to the best small car Australia has on offer right now. The are several well-known small car brands but also several newer players, while there’s also a huge variety.

So, we’ll take you through everything from the best value small car Australia has to the most family-friendly, the best sedan (because not all small cars are hatchbacks) and more.

Best small family car

1. Subaru Impreza

Choosing a good small car for a family is easier than before, as small cars aren’t always so small anymore. The Impreza is a good example of a hatchback with room for a family, at least for those with smaller children. The 345-litre boot is also competitive for the small car market.

2. Mini Aceman

The best part about the Mini is that it’s not so Mini. The latest addition to the range, the all-electric Aceman, blurs the line between hatch and SUV, but provides good space for a family that wants compact, city-friendly transport.

3. Peugeot 308 Wagon

This French option is neither cheap (it’s priced from $55,259, drive-away) nor very popular, but what it is is the last small wagon left to buy in Australia. So it gives family buyers a non-SUV option to consider if they want a bigger boot.

Best new small car

1. Kia K4

Kia has been a stalwart of the small car market, even as others left, and in 2025 it has introduced the stylish new K4. Designed to replace the Cerato, with a hatch coming later in 2025, the K4 is a bigger, more refined small car designed to keep the small car market alive amid the on-going SUV boom.

2. MG MG4

Another newer addition to the small car market, but very different to the Kia. The MG4 is an all-electric hatch that helped to reset both the small car and EV markets, with its combination of technology and value. While the price has crept up since launch (now listing from $41,156, drive-away), it’s still an affordable EV and small hatch.

3. GWM Ora

Arriving around the same time as the MG, the fellow Chinese electric hatch had a similar impact on the market with its initial razor-sharp pricing. Now priced from $35,990, drive-away, it’s still one of the cheapest EVs and a very affordable small car too, for those looking for petrol-free city motoring. 

Best small hatchback

1. Mazda3

In terms of quality, presentation, dynamics and reputation, it’s hard to beat the Mazda3. While it may not sell in the same huge numbers it did back in the early 2010s, the current generation is a much more refined and better-presented proposition. It demonstrates that a small car doesn’t need to feel ‘cheap’. 

2. Honda Civic 

This is another example of the ‘gentrification’ of small cars, with the now hybrid-only Civic starting at $49,990, drive-away, but offering a much more sophisticated product than small cars of the past. The latest Civic looks and feels almost-premium inside and out, and with its efficient hybrid powertrain drives nicely, too.

3. Audi A3

The German brand is on the verge of launching an updated A3 by the middle of 2025. Available as either a hatch or sedan, the A3 is a small car but is also a luxury car. More affordable than its BMW (1 Series) and Mercedes (A-Class) rivals, the A3 range stretches all the way to the high-performance S3 and RS3 models.

Best small sedan

1. Hyundai i30 Sedan

Hatchbacks tend to dominate the small car market, but there are several sedan options worth considering if you prefer a four-door. Hyundai’s i30 Sedan (known as the Elantra in a former life) is available in a range of specifications, ranging from the affordable $29,000 entry-level model all the way up to the $52,000 for the very sporty and dynamic i30 Sedan N.

2. Kia K4

Kia’s new K4 is longer and wider than the Cerato it replaces, putting it at the limits of what can be considered a ‘small car’ but providing extra room for those in the back. As mentioned earlier, the K4 is a more stylish take on the small car compared to the Cerato, but still starts at a reasonable $30,590, plus on-road costs for the 2.0 S, while the sporty 1.6T GT-Line is priced from $42,990.

3. Subaru WRX

Its hard to write a list about small cars, and especially sedans, without mentioning the WRX. Despite Subaru’s best efforts to turn it into a hot hatch, the WRX has always been more popular as a sedan. And while it’s undoubtedly the sportiest car on our list, it’s actually a popular small car in its own right, cracking the top 100 new car sales chart in 2024.

Beloved for its rally-heritage, powerful engine and dynamic all-wheel drive handling, the WRX is a small car icon.

Best value small car

1. Kia Cerato

Priced from $27,060, plus on-road costs doesn’t make the Cerato the cheapest, but in our opinion it makes it the best value. The combination of Kia’s reputation for dependability, plus its seven-year warranty combined with the still-pleasing style and class-competitive dynamics, makes the Cerato 2.0 S easily the best value small car on sale at the time of publication.

2. MG MG5

We can’t pretend it’s the best car on the market, either in the way it drives or for its safety credentials, but the MG5 is affordable. The entry-level Vibe starts at just $27,692, drive-away, which is cheaper than the Cerato, but we’ll give the edge to the Kia based on its superior quality and heritage. But for those looking for a new small car on a budget, the MG5 is impossible to ignore.

3 BYD Dolphin

It says a lot about the current state of the new car market, as well as the emerging Chinese EV industry, that one of the most affordable and best-value small cars is the Dolphin. Priced from just $29,990, the Dolphin is one of the cheapest cars on sale in Australia - period.

Given where EVs were priced just a few years ago, and where most European, Japanese and Korean brands remain priced, the Dolphin represents a great buy for those willing to make the electric switch.

Best All-Rounder

1. Toyota Corolla 

There’s a reason why the Corolla was the most popular small car in 2024 and has been for years. It’s variety, being available in hatchback and sedan with various trims levels, means there is a Corolla to suit most budgets. And, while the hybrid powertrain is certainly popular, the addition of the turbocharged GR Corolla hot hatch has expanded the appeal of this beloved small car. Put simply, this is the best small car Australia offers at the time of writing.

2. Kia Cerato/K4

Given it was the second best-selling small car in 2024 we had to include the Cerato, even if it is in the process of being replaced by the K4. The Cerato is a more affordable model but the K4 elevates Kia’s small car to a more premium place amongst small car brands.

The addition of the K4 hatch will give Kia a rejuvenated small car line-up to take the challenge to the Toyota Corolla in 2025 and beyond, so it should be on your small car shopping list.

3. Hyundai i30

It makes sense to finish this list with the i30, so the three most popular small cars in 2024 are all included. While Hyundai has openly admitted the hatch is due to be discontinued in the near-future, for now it remains a popular choice for Australian new car buyers.

It’s easy to understand why, as it offers European levels of style and driving sophistication, but with the value we’ve come to expect from Asian cars.

The addition of the i30 Sedan gives buyers more choice, and a spacious one at that, with its generous back seats and roomy boot.