Economy cars vs. compact cars: What's the difference?


Photo of old economy car

If you’re looking for something that’s easy on fuel, cheap to buy, cheap to maintain, and doesn’t come with all the bells and whistles, you may be looking to purchase a compact car. Wait, maybe you’re looking to purchase an economy car? In truth, this sounds confusing, and for those that don’t understand the inner workings of the increasingly complex automotive industry, economy cars, and compact cars may appear to be one and the same. In fact, for many years, they were one and the same! However, today’s automotive market has drawn a distinction between these two types of vehicles by creating a completely new class of car that forces consumers to no longer think that a compact car is simply a cheap runabout. 

This article will help determine what the difference is between economy cars and compact cars by expanding your perception of what a compact car can be and showing some real-life examples of vehicles that break the mold. 

What’s a compact car? 

According to the EPA “The United States Environmental Protection Agency (EPA), Fuel Economy Regulations for 1977 and Later Model Year includes definitions for classes of automobiles. Based on the combined passenger and cargo volume, compact cars are defined as having an interior volume index of 100–109 cu ft”. So basically, the compact car fits in between the sub-compact class and the midsize class and is completely defined by its size rather than its interior appointments or performance. Traditional entrants into this class include stalwarts like the Toyota Corolla, Honda Civic, Hyundai Elantra, and Kia Forte. 


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These vehicles are traditionally sedans that have 4 full-size doors, decent sized trunks and, use tiny 4 cylinder engines to achieve fantastic fuel economy performance. Interiors were basic but comfortable and the starting price of these vehicles is commendably low. They are often the starting point for tuners and tinkerers who take vehicles like the Honda Civic and turn them into racy, ostentatious vehicles that can humiliate sports cars that are double their cost. 

Premium Compact Cars

In the last ten years or so, we have seen a shift in this class of vehicles to include another subtype of vehicle: the premium compact car. Manufacturers like Audi and Acura realized that there was a gap that could be filled by vehicles that kept the tidy size and fuel economy of something like a Honda Civic while offering the performance and luxury of a vehicle like the Acura ILX. In fact, the ILX is nothing more than a Civic underneath its luxurious exterior and leather-lined interior. It’s also not uncommon to find compact vehicles like the Elantra loaded up with active safety equipment, leather seats, and high-end stereos masquerading as premium compact cars. 

Compact, sure. Stripped down economy cars, no way! 


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What’s an economy car?

The traditional compact sedans were cheap to buy, cheap to run, and cheap to maintain - thus earning the moniker of “economy car”. In fact, this term is more of a socially constructed marketing term than an actual designation of vehicle. In many situations, it was a pejorative term leveled at these humble automobiles. In fact, many things can be considered an “economy car” if you really think about it. Anything from a 4 cylinder Toyota Tacoma to a Prius can be considered an economy vehicle. So, although these terms were used interchangeably, we’re not quite sure they should have been because an economy car really just depends on whose definition you subscribe to! 


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Compact doesn’t mean cheap

The best thing about the automotive market is that definitions are often built to be shattered. Purchasing a compact car no longer means you’re stuck with an underpowered appliance that’s dull to drive. You can have a small car that still has generous room for 4, gets outstanding fuel economy, contains luxurious interior appointments and is genuinely fun to drive. As with all things, there’s going to be some give and take to achieve your goals. A premium small car like the Audi A3 or Volkswagen GTI will certainly be a pleasure to own but you will pay slightly more in maintenance and insurance than something like a Toyota Corolla or Honda Civic. 

Crucially, to remain competitive, even vehicles like the Corolla have had to step up their game and come with increasingly impressive levels of equipment that were once a pipe dream for compact car owners. The best vehicles lie in the middle ground between premium and non-premium. The Honda Civic, Volkswagen Jetta, and Hyundai Elantra are just a few of the vehicles that make the negative connotation of the economy car a thing of the past. 

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