Economy Cars vs. Compact Cars

Dustin Hawley | Jan 13, 2021

The term ‘economy car’ has been synonymous with the compact segment for decades, but as industry trends change, so does the terminology. Nowadays, the mini-compact and subcompact segments have all but taken over, while most compact cars have grown too big and expensive for the category. We’re going to look at what economy cars are and compare them to compact models in order to highlight their differences. 

Economy car

What are Economy Cars? - Find the best car deals!

What sets economy cars apart from the rest is their low purchase price and affordable maintenance. Even though any vehicle type can theoretically classify as an economy car, tight manufacturing budgets often translate to a majority belonging to the mini-compact and subcompact segments. 

For a car to be considered an economy vehicle, it has to be:

  • Lightweight with a compact design, focusing on maximizing interior room.
  • Possess an acceptable safety rating and ride quality. 
  • Inexpensive maintenance and components. 
  • Contain a small displacement engine with no more than four cylinders.
  • Have an excellent fuel economy of 30 miles per gallon or better. 

The characteristics that make a true economy car often involve compromise. Most economy cars are equipped with only the bare essentials for a true utilitarian vehicle. Designer city cars are similar in size but unique in themselves, focusing on design and enhanced equipment, which usually significantly raises the price. 

One of the main challenges auto designers face is striking a balance between a vehicle’s weight and structural safety, as making the car too light can put passengers at risk. The weight also negatively affects the unsprung suspension mass to sprung mass ratio, making the vehicle’s ride less comfortable. 

Advancements in technology have made it possible for even the smallest engines to produce sufficient power for an economy car. Not only do these vehicles have excellent fuel economy, but they also require less of the engine and transmission oil, which brings the cost of servicing the car down.

Compact Cars: An Overview - Find the best car deals!

The first thing that needs to be clarified is the connection between a compact and an economy car. Compact cars are generally as large as economy cars can get, but most do not adhere to the criteria and are categorized differently. 

The only requirement for a car to be considered a compact is to have an interior volume index between 100-109 cubic feet and have the ability to seat up to four passengers comfortably.

Hatchbacks, liftbacks, and smaller sedans are the best examples of the compact segment. Their prices can vary depending on the brand, model, and trim package. They are also typically more expensive than vehicles in the economy class. 


To provide the best and most accurate data, we will focus on compact cars that do not belong to the economy class in order to portray their differences more effectively. Afterward, we’ll take a look at economy compact cars and their benefits - as well as drawbacks - over smaller vehicle options. 

Dimensions & Space

Design reveals some of the first differences between these two vehicle types. Economy cars are visibly smaller and typically have two doors, while compact models often come in both two-door and four-door variants. 

The trunk door provides access to the merged cargo and passenger compartment, with only a few compact models offering a separated trunk. You can store luggage for a short family vacation in a compact car, but an economy car is often not designed to carry much more than a few grocery bags. 

In terms of interior room, economy cars have sufficient space in the front for two adults, and if a rear bench is present, it’s suitable only for children. On the other hand, a compact car offers reasonable seating for five passengers or four adults. 


The base trim levels of either class usually come with only the necessary mechanical and safety features for a functional vehicle. Anything in addition to these functions will require you to pay extra. The range of optional features can be impressive, but choosing too many can quickly defeat an economy car’s purpose.


As the economy cars from the mini-compact and subcompact segment are made primarily for use in the city, the engines are optimized to provide the best mileage under frequent acceleration and braking. Start & Stop technology is widely spread to reduce emissions and fuel consumption when idling. These engines’ drawback is low top speed and poor acceleration, a clear detriment on the open road. 

On the other hand, compact cars are not restricted by engine size and can offer both small, city-friendly engines as well as larger, more powerful options. Typically not passing displacement of 2 liters, these motors provide plenty of power for an exciting and enjoyable ride. The price you pay for such an experience is inferior fuel economy in the city, even on vehicles with Start & Stop technology.

Handling & Ride Comfort

Increased size and weight allows the compact car to deliver better handling and optimized suspension for improved ride comfort, making it viable as a short-trip vehicle. Economy cars can’t quite offer the same, which is why they’re best suited for daily commutes and short city trips.

Fuel Consumption

The economy cars justify their name with the industry-leading fuel consumption, ranging between 30 to 35 miles per gallon of city drive. Compact cars with smaller engines can’t achieve more than 30 mpg because of the weight difference, but when equipped with a larger engine, they can achieve better open-road mileage thanks to the abundance of power. 

Economy Compact Car: Rundown - Find the best car deals!

With specific design choices, a vehicle from the compact segment can be a “large” economy car. Some of the advantages carry over, such as the increased passenger and cargo space. But that also makes them more expensive than the mini or subcompact models.

Summary - Find the best car deals!

Available budget and personal requirements are going to dictate what kind of vehicle you should get. An economy car is the cheaper option to both purchase and maintain and is excellent for a daily commuter. Compact cars are a better choice in terms of versatility, but they do require a deeper wallet.

We hope this guide has clarified some of the key differences (and similarities) between compact cars and economy cars. As always, you can find more information on all of your automotive needs here on our website!

Explore new car previews
2023 Honda Pilot Preview
2023 Honda Pilot Preview
The fourth-generation 2023 Honda Pilot is about to go on sale, and Honda substantially upgrades it over the popular third-generation model it replaces. Honda will offer the redesigned 2023 Pilot in Sport, EX-L, TrailSport, Touring, and Elite trim levels in December 2022.
Read the full review
2023 Honda Accord Preview
2023 Honda Accord Preview
The 2023 Accord is the 11th-generation version of the car that first went on sale in America in 1976, and it is a far different vehicle from the one that made the nameplate a household name.
Read the full review
2023 Ford F-Series Super Duty Preview
2023 Ford F-Series Super Duty Preview
F-Series Super Duty trucks got what they needed for the 2023 model year. Ford announced a more powerful line of heavy-duty trucks with a load of available new tech, great standard safety features, and unique upfits to make the trucks more appropriate for specific industries.
Read the full review
Read all articles

Scroll to the top
New Car Preview
2025 Ram 1500 Revolution Electric Truck Concept Preview
Most Dependable
2019 Vehicle Dependability: Most Dependable Family SUVs
Most Popular
10 Most Popular Midsize SUVs and Crossovers
New Model Update
New for 2019: Toyota Trucks, SUVs, and Vans
New Car Preview
2024 Subaru Impreza Preview
More related