Key Difference: Economy cars are basically a segment which includes cars that are affordable for the general public; these are cheaper to purchase and cheaper to maintain. Compact cars are small cars that offer a variety of features; however just because they are small does not mean that they are cheap.

There are many different types of cars that have become available in the market. The boost in the car market has been due to the increase in spending power all over the world, and the constant decrease in the price of technology. In order to distinguish all the different types of cars that have become available in the market, they have been divided into different segments. Two of such segments include compact cars and economy cars.

Economy cars are basically a segment which includes cars that are affordable for the general public; these are cheaper to purchase and cheaper to maintain. In addition to the low operational costs these cars offer high fuel efficiency, which translates into low monthly expenditure on gas or petrol. These cars are also made lighter in order to reduce the drag on the vehicle contributing to higher fuel efficiency. Economy cars are more commonly purchased in bulk and used by transportation companies.

Due to this class being cheaper, it also offers fewer features, but it does give the owner an option to externally add features which increases the price of the vehicle. These cars are intended for those that are on a tight budget who require the vehicle for necessity and not for luxury. The economy cars are most commonly produced in bulk, with the manufacturer also making spare parts for them in bulk; making it cheaper for car maintenance and replacement of products. The main thing to remember about economy cars is that which car constitutes as an economy car varies depending on time, place and the conditions such as fuel price, disposable income and culture. For example, Fiat Fiesta is considered as an economy car in the United States and Europe, while in India it is considered as a compact car.

Compact cars are small cars that offer a variety of features; however just because they are small does not mean that they are cheap. They offer a larger boot space compared to economy cars but offer less fuel efficiency. The compact cars in the United States and Europe are classified in the C-segment. They are said to larger than a subcompact car, but smaller than a mid-size car. Size of a vehicle in the C-segment in the US is approximately 4,100 mm (161 in) and 4,450 mm (175 in) long for hatchbacks, or 4,400 mm (173 in) and 4,750 mm (187 in) long for convertibles, sedans or station wagons.

Vehicles in the compact are limited to a special size, while economy cars could also be bigger compared to compact cars. Compact cars are most popular sough after due to the amount of features that are offered as well as new innovations and technologies by a manufacturer is also offered with the car. Compact cars also offer more legroom and internal space. Compact cars can also be customized with additional features such as TVs, color, wheel rims and etc. Compact cars are best for cities which have small and narrow roads such as Italy or Rome.

If looking for a vehicle in a certain budget, it is best to opt for an economy car, however if you have a little extra money to spend compact cars offer a better engine and additional features.

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