New Car Buyer's Guide: Five Best City Cars

When it comes to runs on the board, it’s hard to go past the Toyota Corolla. Since its inception in 1966, the Japanese brand’s small car has developed through 12 generations and six decades to become the world’s best-selling car – of all time.

Therefore, on its 60th birthday, the 2026 Toyota Corolla deserves a party.

Yet, while sales have dwindled Down Under since it’s chart-topping noughties heyday, the Corolla is still a strong prospect. Now hybrid-only, all variants sip their way to class-leading efficiency of 4.0L/100km, but in the real world you can actually get better numbers than this.

Helping it achieve this is the long-serving petrol-electric hybrid powertrain with a combined output of 103kW. Like most Toyotas it’s also got unbeatable resale values and a strong reputation for reliability, making this one of our top picks.

Yet, there are some gripes you should be aware of. The back seat is tight for adult-sized occupants, and the 217-litre boot is small by segment standards (although the sedan version fixes this).

The Corolla range no longer holds an ANCAP safety rating, however its safety systems aren’t as intrusive as some rivals.

The cabin’s build quality is Toyota-solid and, especially in the ZR, there’s an upmarket vibe. It’s an absolute breeze to operate, and the driving experience reflects this – it’s effortless to hop in and cruise away.

Matching the low fuel use is cheap running costs, with the first five services capped at $265 apiece (12 months/15,000km intervals). Toyota’s five-year/unlimited-kilometre warranty also applies.

The line-up starts at $32,110 plus on-roads for the base Ascent Sport, while the $35,260 SX and $39,100 ZR round out the hatch range. There’s also a stir-crazy, rally-bred GR Corolla, but that costs the best part of $70K.

2026 Toyota Corolla hatch at a glance:
Price: $32,110 to $70,490 (plus ORCs)
Engine: 1.8-litre four-cylinder petrol-electric (103kW combined)
Fuel: 4.0L/100km
Warranty: Five years/unlimited kilometres
Servicing: Five years of capped-price servicing ($1325)
Safety: Unrated

If cars were thought of as holiday destinations, then the 2026 Skoda Kamiq would fall into the ‘hidden gems’ category. And while you might think it’d be constrained by it compact dimensions, the 4.2-metre-long small SUV packs a surprisingly large 400-litre boot and a back seat big enough for kids and adults.

The variant to pick is the entry-level 85TSI Select, which starts from $33,990 (drive-away) – but look around as Skoda often has periodic special deals. Either way, it makes more sense than the more powerful and dearer 110TSI Monte Carlo ($43,890) whether you’re on a budget or not.

A small turbo-petrol engine (85kW/200Nm) might appear or sound underdone, but it’s only dealing with 1310kg – light as a feather for an SUV. In practice, the thrummy little engine works well with the front-wheel drive layout and seven-speed transmission. It’s also thrifty at a claimed 5.5L/100km – we achieved 6.4L/100km on test.

Joining the competent driving dynamics is a decent level of active (but not intrusive) safety systems. It comes with a five-star ANCAP rating, although it misses out on items like adaptive cruise control and a 360-degree camera. Still, for the price, it’s good going.

That theme continues inside the cabin with an 8.0-inch digital instrument cluster and an 8.25-inch infotainment touchscreen with wireless smartphone mirroring. There’s an upmarket ambience to the cabin, with a cloth dash, impressive storage for all your knick-knacks and great outward visibility.

Skoda’s seven-year/unlimited-kilometre warranty adds peace of mind and the first seven years of servicing is competitively priced for a European brand at just under $2700.

2026 Skoda Kamiq at a glance:
Price: $33,990 to $43,890 (drive-away)
Engine: 1.0-litre three-cylinder turbo-petrol (85kW/200Nm); 1.5-litre four-cylinder turbo-petrol (110kW/250Nm)
Fuel: 5.3 to 5.5L/100km
Warranty: Seven years/unlimited kilometres
Servicing: Seven years of capped-price servicing ($2650)
Safety: Five-star (ANCAP 2024)

If you’re on a strict budget or simply looking for a first car, then you can’t go past the 2026 Kia Picanto – especially the Sport. In base-grade, five-speed manual form, the $19,190 (before ORCs) price makes it the cheapest new car on sale in Australia right now.

Opting for the old-school four-speed automatic bumps that cost to $20,790 and the range-topping GT-Line commands a $22,590 price tag.

But value isn’t the only reason to consider the pint-sized Picanto, because it pairs affordability with quality. The cabin feels well-built, while the ergonomics are also sound. It even boasts an 8.0-inch infotainment touchscreen and a semi-digital instrument cluster.

Space in the back isn’t great, but for the segment, the 250-litre boot is comparatively good. Safety kit is about covering bases, with six airbags and lane-keeping tech, but it misses out on LED headlights and its four-star ANCAP rating from 2017 has expired.

Yes, it’s only a pipsqueak with a tiny four-cylinder petrol engine, but the Picanto has received a local tune for its suspension, improving its ride and handling, which is a big bonus.

And what it lacks in power, it gains in efficiency. Choose the manual and the official average consumption figure is 5.4L/100km – yet we saw a hybrid-rivalling 4.8L/100km on test which is very impressive. What’s more, its 35-litre fuel tank accepts cheaper 91 RON unleaded petrol.

Kia’s seven-year/unlimited-kilometre warranty plan stacks up well but it’s not the industry-leading program it used to be (rivals have fought back). Servicing is also on the expensive side for this type of car, with seven years of capped-price services totalling just over $3000.

2026 Kia Picanto at a glance:
Price: $19,190 to $22,590 (plus ORCs)
Engine: 1.2-litre four-cylinder petrol (62kW/122Nm)
Fuel: 6.0L/100km (automatic transmission)
Warranty: Seven years/unlimited kilometres
Servicing: Seven years of capped-price servicing ($3084)
Safety: Five-star (ANCAP 2024)

Despite only being in its second generation, the 2026 Hyundai Kona has risen to be the brand’s most important model. Indeed, not only is it Hyundai's highest seller, but it also outsold almost all its small SUV rivals.

It’s now dimensionally bigger, too, with loads of options including four model grades and four powertrain options. They include petrol, turbo-petrol (temporarily), hybrid and battery-electric.

Prices range from $33,700 to $71,000 before on-road costs, with the increasingly popular hybrid versions starting from around $37,000.

At $39,950, the 2026 Hyundai Kona Hybrid Elite makes the most sense with its combined average fuel consumption of 3.9L/100km, especially given the 110kW 2.0-litre petrol engine only offers slightly more power (and noticeably less torque) but uses around 70 per cent more fuel.

Inside is where the added square footage is felt with a spacious and practical cabin, which is perfect for small families. The cargo capacity is accommodating at 407 litres – which expands to 1241L with the 60/40-split folding rear seats stowed – and the tech is up to date with a rather fancy 12.3-inch infotainment touchscreen.

On paper, the four-star ANCAP safety rating (2023) could be a stumbling block, but it was conducted under the more stringent protocols.

Hyundai’s beefed-up seven-year/unlimited-kilometre warranty applies, while the EV's lithium-ion battery is covered for eight years/160,000km. Servicing is due every 12 months/15,000km, with the first five years of garage visits capped at $3000 with a pre-paid plan.

2026 Hyundai Kona at a glance:
Price: $33,700 to $71,000 (plus ORCs)
Engine: 2.0-litre four-cylinder petrol (110kW/180Nm); 1.6-litre turbo-petrol (146kW/265Nm); 1.6-litre four-cylinder petrol-electric (104kW/265Nm); battery-electric (99-150kW/255Nm)
Fuel: 3.9 to 6.6L/100km; 370km to 505km electric range (WLTP)
Warranty: Seven years/unlimited kilometres
Servicing: Five years of capped-price servicing ($3000)
Safety: Four-star (ANCAP 2023)

Refreshing surprises are generally few and far between in the automotive industry, but the Leapmotor B10 is proof they’re still possible. It even totes chassis tuning from Maserati and rear-wheel drive!

However, you don’t necessarily buy an electrified small SUV for how it drives. What the 2026 Leapmotor B10 does well is offer loads of tech, quality and practicality for pert pricing. Being offered from $37,888 (plus ORCs) for the Style and $40,888 for the Design Long Range (LR), the B10 puts legacy brand EVs on notice.

The LR part of the equation results in a cruising range of 434km (73km more than the Style) thanks to its bigger (67.1kWh) lithium-ion battery, yet both grades receive the same rear e-motor (160kW/240Nm) for zippy acceleration (8.0s 0-100km/h).

Find the right DC public charger (up to 168kW) and you can fast-charge from 30 to 80 per cent in 18 minutes. It also has vehicle-to-load (V2L) capability, so you can operate serious appliances, like an air fryer.

Almost more impressive is the interior space (490-litre boot) and quality. For the price, few rivals can match the B10’s soft-touch materials or tight fit and finish. As with all Chinese offerings, it’s loaded with tech and now, thanks to an over-the-air (OTA) update, runs wireless Apple CarPlay and Android Auto.

Some of the active safety systems could use an update of their own, with the lane keeping being the most intrusive. The B10 has a five-star ANCAP safety rating, a strong six-year warranty and competitive servicing costs: five years of capped-price total $1766.

2026 Leapmotor B10 at a glance:
Price: $37,888 to $40,888 (plus ORCs)
Engine: Permanent magnet (160kW/240Nm)
Range: 361km to 434km WLTP (56.2 to 67.1kWh lithium-ion battery)
Warranty: Six years/150,000 kilometres
Servicing: Five years of capped-price servicing ($1766)
Safety: Five-star (ANCAP 2025)

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