What is the best small car under 20k?

Front side view of a white Kia Picanto GT parked in a driveway

Tim Nicholson

Posted June 03, 2019

We’ve compared four of Australia’s top-selling small cars under $20,000.

Gone are the days when small city runabouts were unsafe and unreliable. Many have the latest safety features and more than a few have earned five-star ANCAP safety ratings.

Many manufacturers now offer high-quality micro and light cars, but despite many buyers downsizing, sales in these two segments have dropped in recent years. Several car-makers have pulled out of the segment because they don’t make much profit on sub-$20,000 cars.

Well-known nameplates such as the Holden Barina, Nissan Micra, Suzuki Celerio and Mitsubishi Mirage sedan have all disappeared in the past couple of years. Even Ford has dropped regular versions of its Fiesta, opting instead to offer only the ST performance variant.

Despite the sales decline, there are still some seriously impressive micro and light cars priced at less than $20,000. Here are some of our top picks.

Don't forget: Micro and light cars are no longer the tinny, unsafe buzzboxes of the past. Manufacturers are placing greater emphasis on structural and active safety for even their smallest offerings. However, some older models may lack the latest technology, so check that your preferred city runabout has adequate safety equipment.


In this article

Mazda2 Maxx

Volkswagen Polo 70TSI Trendline

Kia Picanto GT

Fiat 500 Pop

Rear side view of a red Mazda2 Maxx

Mazda2 Maxx ($17,690)

The Mazda2 is the second-best selling light car in Australia – behind Hyundai’s ageing Accent – and there is good reason for it. The Mazda is one of the best driver’s cars on offer for under $20,000.

It is powered by a 1.5-litre four-cylinder petrol unit that is also found in the excellent MX-5 roadster, although the drop-top gets more power and torque.

Depending on whether you choose the six-speed manual or auto, fuel use ranges from 4.9 to 5.5L/100km on the combined cycle – nothing to be sniffed at. The 2 also has an impressive equipment list, which notably includes AEB as standard across the range.

The Mazda2 is a few years older than the VW Polo, but the cabin still feels brand new and it has a semi-premium feel that most of its rivals can’t match.

The Mazda2 is let down by its lack of refinement. Mazda has spent a lot of its research and development money improving the cabin noise of recent models, but the 2 was launched just before this.


Thumbs up: 1.5-litre engine is a delight. A car for driving enthusiasts.

Thumbs down: Inadequate insulation means it has a noisy cabin.

Rear side view of a white Volkswagen Polo 70TSI Trendline

Volkswagen Polo 70TSI Trendline ($18,790)

The Polo is the priciest offering here and it only just crept in to the sub-$20,000 category. Swap the manual out for an auto and it jumps to $21,290. Higher entry price aside, the Polo is a quality offering that is light years ahead of many of its rivals.

The latest Polo has grown considerably in its latest generation and is bigger than the Mark IV Golf small car that ended production in 2004. It is the largest offering among this group by some margin.

The Polo has a level of refinement the Mazda can’t match and its modern and minimalist interior features the latest Volkswagen infotainment system with Apple CarPlay and Android Auto. Safety wise it has AEB, a five-star ANCAP rating, a reversing camera and tyre-pressure monitor.

The VW also excels as a driver’s car. Like the Mazda, it is engaging and fun behind the wheel. The 1.0-litre three-cylinder turbocharged engine is a real sweetie and can be pushed hard. Fuel use is 4.8L/100km for the manual. Like Mazda, the Polo has a five year/unlimited-kilometre warranty.


Thumbs up: Great performer that feels well put together and semi-premium.

Thumbs down: Pricier than many of its rivals.

Front side view of a white Kia Picanto GT 2019 car in motion

Kia Picanto GT ($17,990 driveaway)

The Picanto is a true success story in Australia’s declining micro/light car segment. Kia launched its baby hatch here in April 2016 – five years after it went on sale internationally and just a year before its replacement arrived.

In its first year on sale it became the second-best seller in its segment. Fast forward to May 2017 and the new-generation Picanto arrived with massive improvements to refinement and packaging, as well as safety, while maintaining low pricing. The new model built on the success of the 2016 version, with press and punters alike praising its looks, standard features list and zippiness.

In January this year, Kia launched a warmed-up GT version of the Picanto that swapped out the regular variants’ 1.2-litre four-cylinder petrol engine for a 1.0-litre three-cylinder turbocharged unit delivering 74kW/172Nm. It sips 4.8L/100km of fuel.

It is paired with a five-speed manual only and features a 15-millimetre lower sports suspension set-up for a sportier ride, as well as a sporty-looking body kit with red detailing and unique 16-inch alloy wheels.

The Picanto is big on value and benefits from Kia’s industry-leading seven-year/unlimited-kilometre warranty, but given it is a micro car not a light car, it can’t match the space of the Mazda or the VW.


Thumbs up: Best bang for buck in the segment and it’s a joy to drive.

Thumbs down: Some of the cabin plastics feel cheap.

Front side view of a red Fiat 500 Pop driving on a road

Fiat 500 Pop ($17,990)

The Fiat 500 might be the oldest model in this group, but more than 10 years into its life cycle, the bambino is still the most stylish option in the segment.

A modern version of the iconic Fiat Cinquecento that was offered from 1957 to 1975, the new 500 has benefited from many updates in the past decade, giving it more standard equipment and styling tweaks to keep it fresh.

It has had a five-star ANCAP safety rating since 2009. It doesn’t come with autonomous emergency braking (AEB), but it does have seven airbags, a speed limiter and tyre-pressure monitoring.

And it’s better value now than it ever has been, priced from $17,990 before on-road costs for the base Pop with a five-speed manual. A five-speed automatic adds $1500 to the price.

The tiny 1.2-litre four-cylinder engine is super fuel-efficient too. The 500 Pop sips just 4.9L/100km on the combined cycle. It’s not blisteringly fast, it has an awkwardly high-set driving position and there is no reach adjustment for the steering wheel. But it’s still a joy to drive and has loads of Italian charm.

Fiat trails its competitors when it comes to its warranty period which is still just three years or 150,000 kilometres.


Thumbs up: Its retro design is a standout.

Thumbs down: Lacks some of the latest safety and in-car tech.

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