Hatchback vs Sedan – Which One Should You Buy?

Compare the key features of hatchbacks and sedans to help you make the right choice for your needs and lifestyle.
Published on December 4th, 2020
  Written by 
Adrian Edlington
Adrian Edlington is PR & Communications Manager at Savvy. With a keen interest in personal finance, car loans, the mortgage industry, cost of living pressures, electric vehicles and renewable technology, Adrian's research includes conducting primary data surveys and analysis of up-to-the-minute secondary Australian data sources. His work on behalf of Savvy has been featured on ABC.net.au The Conversation, the Sydney Morning Herald, AFR, News.com.au, The Age, Herald Sun, Adelaide Now, SBS On The Money, 7News, Car Expert, Which Car, Drive.com.au and more. In his spare time, Adrian enjoys mountain biking and business podcasts.
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   Reviewed by 
Bill Tsouvalas


Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Hatchbacks and sedans are two of the most popular car body styles, but choosing between them can be tricky. Both offer distinct advantages and the best choice depends on your individual needs and preferences. Let's break down the key features of each style to help you navigate this decision.

What is a hatchback?

Hatchbacks – also referred to as a ‘hatch’ – are small, versatile passenger cars characterised by their rear hatch door that opens upwards, providing easy access to the cargo area. They are popular for their practicality, fuel efficiency and general affordability compared to other types of cars.

Hatchbacks typically feature a shorter rear overhang compared to sedans, giving them a more compact and sporty appearance. With the cargo area integrated into the main cabin space and foldable rear seats, the cars are well suited for transporting bulkier items and luggage. Furthermore, their compact size and tight turning radius make them well-suited for navigating crowded urban streets and tight parking spaces.

What is a sedan?

A sedan, also known as a saloon in some regions, is a type of car body style with a closed-off boot separate from the passenger cabin. Sedans typically have four doors – two front doors for the driver and front passenger, and two rear doors for passengers accessing the back seats. However, there are also two-door sedan variants known as coupes.

Sedans are popular for their comfort, refinement and smooth ride quality, and appeal to a wide range of drivers seeking a versatile and functional vehicle.

Hatchback sedan body

Hatchback highlights and downsides


  • Ample cargo space: with the rear seats folded, hatchbacks offer a surprisingly large and versatile area for luggage, groceries, sports equipment or even pets.
  • More manoeuvrability: their small, compact size makes hatchbacks easier to handle in tight city streets and parking situations.
  • Fuel efficiency: in general, hatchbacks tend to be more fuel-efficient than larger vehicles, helping drivers save money on fuel costs over time.
  • Affordability: hatchbacks are often cheaper to buy and run than other car types, making them an attractive option for budget-conscious buyers.


  • Passenger space: due to their compact design, hatchbacks may have limited rear headroom and legroom, which could make passengers feel cramped.
  • Less soundproofing: some hatchbacks may have slightly less soundproofing than other vehicles, potentially leading to more road and wind noise in the cabin.
  • Limited off-road capability: while hatchbacks are well-suited for urban driving and paved roads, they may not offer the same off-road capability as SUVs or crossovers.

Sedan strengths and weaknesses


  • Spacious comfort: sedans generally offer more legroom and headroom for both front and rear passengers, ensuring a comfortable ride for everyone on board.
  • Secure boot: the separate boot compartment provides a secure and protected space for your belongings. This can offer peace of mind and prevent loose items from rolling around the cabin.
  • Refined ride: sedans often offer a quieter and more refined driving experience, with enhanced soundproofing leading to a more peaceful and comfortable journey.
  • Classic style: sedans offer a timeless and sophisticated look that appeals to many drivers.


  • Cargo constraints: while sedans offer decent boot space, they generally can’t compete with the cargo capacity of a hatchback with folded seats.
  • Manoeuvrability: The larger size and length of sedans can make navigating tight spaces and parking a bit more challenging compared to a nimble hatchback.
  • Fuel efficiency: sedans can be slightly less fuel-efficient than hatchbacks due to their increased weight and size.

Which has better resale value – hatchbacks or sedans?

Traditionally, hatchbacks have been considered to hold their resale value slightly better than sedans. This is due largely to their versatility and affordability. However, sedans are also strong contenders. In fact, both hatchbacks and sedans dominated CarExpert’s list of cars in Australia with the best resale value.

Whether you have a hatchback or a sedan, there are a number of ways to maximise resale value:

  • Choose a popular and reliable brand.
  • Opt for neutral colours like black, grey or silver.
  • Maintain the car regularly with proper servicing.
  • Keep the car clean and in good condition.
  • Consider desirable features.

Ultimately, the best choice between a hatchback and a sedan for resale value depends on the specific model, market conditions and the car's overall condition.

Making the choice: it's all about your needs

Now that you're familiar with the key features of hatchbacks and sedans, it's time to consider your driving needs and lifestyle. Here are some questions to guide your decision:

  • How much cargo space do you typically need?
  • Do you prioritise passenger comfort or cargo flexibility?
  • How important is fuel efficiency to you?
  • Do you frequently navigate tight city streets or parking lots?
  • What kind of driving experience are you looking for – sporty, comfortable or a balance of both?

A hatchback can be a good choice if:

  • You need a lot of cargo space and versatility.
  • You frequently drive in tight city areas.
  • Fuel efficiency is a major concern.
  • You travel light or have minimal passengers.

Sedans are a good choice for:

  • Families or those who frequently transport passengers.
  • Drivers who prioritise a comfortable and quiet ride.
  • People who appreciate a classic and sophisticated car style.
  • Those who don't require a massive amount of cargo space on a regular basis.

Remember, this is just a starting point. Test drive both styles to see which one feels more comfortable and suits your driving needs best.

Whether you settle on a hatchback, sedan or another type of car, Savvy can help you with your financing needs. We work with more than 40 lenders across Australia to help our clients find a deal that best suits their needs and budget. We can help you too. Enquire with us and get started today.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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