Get the Tata Capital App to apply for Loans & manage your account. Download Now


Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required

Tata Capital > Blog > Loan for Vehicle > 5 Reasons Why Small Cars are So Important in the Indian Used Car Market

Loan for Vehicle

5 Reasons Why Small Cars are So Important in the Indian Used Car Market

5 Reasons Why Small Cars are So Important in the Indian Used Car Market

Price-sensitive and seeking value for every rupee spent, an average Indian car buyer's premier choice is the small car. However, that's just one of the reasons why Indian roads are flooded with compact vehicles.

There are several other advantages of small cars that make them a top pick in the Indian used car market. These include:

The Indian traffic

Honda’s CEO, Gaku Nakanishi, stated that the "small car segment has the best potential in India" in light of the traffic conditions and parking constraints of the country. Given their size, small cars are often a breeze to drive in city traffic. And since most of the daily commuting rarely involves leisure driving – think to and from work, drop/pick kids from school, a quick grocery run, and more – it is natural for car buyers to lean more towards modest hatchbacks.

The price factor

The price is one of the major concerns for every Indian car buyer unless of course, they're a car enthusiast. This is especially true of first-time car buyers who are merely looking to make an upgrade from two-wheelers. When the budget becomes a concern, justifiably, the compact car wins!


Another of the many benefits of small car is fuel-efficiency. Given their low weight, compact cars are capable of delivering more mileage, thereby helping cut down on fuel costs. It comes as no surprise that the modest car wins again since almost every car owner out there is looking for ways to maximise fuel-efficiency.

Additional Read: Hatchback Cars with Maximum Mileage Best Suited For Indian Roads


This may come as a shock at first; however, the truth is that despite being small in size, hatchbacks are just as spacious, if not more than sedans and SUVs which have a lower roofline. As a result, passengers seated at the rear end of the vehicle may need to resort to slumping. Since hatchbacks generally have more roof height, they make room for bulkier cargo. Essentially, they make the most of space usage.

Additional Read: Hatchback Cars with Maximum Space Perfect for a Family of Four

The ideal learner’s car

When it comes to the preferred choice for car learners, it’s the modest hatchback that takes the trophy. Their compactness and simpler driving mechanisms make them incredibly convenient to drive.

Owing to their popularity, second-hand hatchbacks are available at fairly lower prices without compromising their quality or performance. To purchase one, you can avail of a used car loan.

However, ensure that you choose a reputed lender such as Tata Capital. Our used car loan interest rates are among the most competitive in the industry.

You can avail of a loan amount as high as Rs. 50 lakhs with us for a tenure of 12 to 60 months. Suit yourself by checking your repayment capacity using our online used car loan EMI calculator.

So, what are you waiting for? Get in touch with us today and make use of our customised offerings and relaxed used car loan eligibility criteria!

Leave a Reply

Your email address will not be published. Required fields are marked *