Hatchback vs sedan: How to make your decision

Finance Writer · 8 September 2021
Should you buy a hatchback or a sedan? Here are some key points to consider when deciding which type of car is right for you.

Despite the pandemic, lockdowns and infrequent state border closures, Australia’s new car market is maintaining traction. The Federal Chamber of Automotive Industries (FCAI) reports year-on-year (YoY) results show the market increased 16.1% YoY for the month of July.

And while utes may presently be the top-selling new vehicles in the nation, Australians still have a deep love for small cars. If you’re in the market for a smaller passenger vehicle, you may be tossing up between a hatchback vs sedan.

In this guide:

What’s the main difference between hatchbacks and sedans?

The main difference between a hatchback and a sedan is the boot space. Generally, hatchbacks have no divide between the rear seats and the boot door, allowing greater storage. In sedans, the boot is separated from the rear passenger compartment. Here are a few other ways their features vary and why you might choose one shape over the other.

What is a hatchback?

A hatchback is a small passenger car with a large boot. A hatchback’s roof doesn’t drop to meet the boot; instead, it has a rear door that opens upwards so you can reach the entire cargo area at once. Most hatchbacks let you fold down the rear seats when not in use, for even more storage space.

Hatchbacks can be sub categorised based on size, from ‘city’ (e.g. Volkswagen Polo) through to ‘large’ (e.g. Audi A7 hatchback) as well as function, from ‘family’ (e.g. Peugeot 508) through to ‘performance’ (e.g. Mercedes-Benz A-Class).

Pros and cons of hatchbacks


  • The boot is bigger in a hatch, so you can fit more booty in! You might choose a hatchback if you need extra space to move a lot of things, such as a pram and shopping all at once. You could even fold the rear seat down to get your new bed frame home from IKEA (as my partner recently did).
  • Hatches are a good learner driver car. As the body is usually shorter, with a shorter bonnet, it’s easier to see where the car ‘ends’, which could help to avoid carpark run-ins. CarsGuide suggests that hatches are the easiest way to move about in cities – and stop and park – given their smaller size makes them generally smoother to manoeuvre around tight city streets and traffic.
  • Traditionally, hatchbacks have tended to hold their resale value better than sedans. CarsGuide reports that the Honda Jazz leads the pack here, retaining a 67% residual rate after three years. Hatches also tend to be cheaper to buy new.
  • Given their average lighter relative weight, hatchbacks may have better fuel economy than a sedan, which could help with driving more efficiently to save some extra cash.


  • Most standard hatchbacks and sedans are fairly equivalent in terms of grunt power, although you might find some sedan models with more powerful engines. However, CarsGuide reports that newer model hatches like the Mercedes-AMG  A 45 S 4MATIC+ can deliver huge power too.

What is a sedan?

A sedan is the traditional shape of passenger cars where the roof slopes down to a boot that is separate from the passenger cabin. Fun fact: Sedans are named after the sedan chair, a throne that had a roof and four carrying poles attached, so that rulers, dignitaries and royalty could be carried about by their servants.

Sedan sizes vary from ‘small’ (e.g. Toyota Corolla) to ‘extra-large’ (e.g. Lexus LS) and can also be sub categorised by function, for example, high-performance sports sedans like the BMW M5.

Pros and cons of sedans


  • Strong driving power can mean a smoother drive for both driver and passengers.
  • The sedan is usually longer than a hatch, which can mean more leg room for those in the back. This is great once your kids become long-limbed teenagers.
  • The sedan can be quieter in terms of road noise, because they have more layers of isolation between the rear wheels and the cabin.


  • Generally more expensive than hatchbacks, and tend to depreciate faster.
  • Less fuel economy than hatchbacks (on average).
  • Bigger bodies can be harder to park in tight spaces.

The Toyota Corolla and Hyundai i30 seem to be Australia’s favourite small cars, at least for the time being. The FCAI report lists the humble Corolla as the third best-selling new car in July, with the i30 coming in at seventh position. Both models are available in hatchback and sedan.

Other popular sellers are the Kia Cerato (sedan and hatch), Mazda 3 (sedan and hatch), and Volkswagen Golf (hatch).

What about station wagons and SUVs?

Are SUVs our family favourite? The FCAI reports that SUV sales are up by 15% on July last year, with benefits often including a spacious interior and perceived practicality, safety and versatility.

Station wagons look like a big hatchback with a much longer boot and generally have more grunt power than a standard hatch. They tend to be a niche alternative to SUVs, balancing practicality, performance and efficiency, sometimes at a cheaper price.

So, if hatchbacks and sedans seem too small and you’re in need of a car with a bit more space for people or possessions, then these types of cars could be worth considering.

Hatchback vs sedan: deciding which is right for you

There are obviously pros and cons to every car on the market, and what’s best for you will really come down to what you value most. The main factors will likely be space, power and costs. A hatch might make sense if you’ll be zipping around narrow city streets for short trips or if you transport the push bike around for scenic weekend rides, whereas a sedan might make for a better family road trip car, given they often have more legroom and engine power.

You could weigh the pros and cons with a few test drives to see how each car type feels on the road. Also consider comparing car insurance, as premiums may vary depending on the model of car you choose.

Canstar Blue has vehicle reviews, so if you are considering purchasing a new car, you can see how Aussie consumers have rated new cars from a range of brands.

Cover image source: J.AMPHON/Shutterstock.com

Thanks for visiting Canstar, Australia’s biggest financial comparison site*

This content was reviewed by Finance and Lifestyle Editor Shay Waraker and Sub Editor Jacqueline Belesky as part of our fact-checking process.

Kelly Stone is one of Canstar's experienced finance writers, covering car finance, personal loans, insurance, superannuation and more. She has more more than 10 years' experience in professional services writing.

Share this article