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Why you could soon get a small car at a bargain price

Small cars are set to make a comeback in 2016 with competitively priced new models like the Kia Picanto.

Buying on a budget will be the big winners of a small-car price war that's just around the corner.

Sales of city cars were down dramatically last year — cut by more than one-third — as buyers continued to embrace SUVs in record numbers.

Several car companies have reacted by sharpening their deals and introducing new models to get small-car buyers back into showrooms.

It means there will be more models available from the popular $13,990 price point.

Next month, Holden will launch a new pint-sized city car called the Spark, expected to start from $13,990 plus on-road costs, and which has luxury-car features on a budget price.

The new Holden Spark is set to be the cheapest car on sale in Australia with Apple CarPlay and Android Auto, which mirror smartphone applications on the car's audio display screen to reduce driver distraction.

Suzuki and Volkswagen introduced Apple CarPlay on certain models last year, but more brands are set to follow, including Hyundai, which is adding smartphone display functionality to its i30 small car and SantaFe SUV.

Hyundai will also add Apple CarPlay to its cheapest model, the $14,990 Accent, by the middle of this year.

Meanwhile, Kia is set to join the city-car segment for the first time in Australia.

The new Kia Picanto is expected to cost just $14,990 drive-away with automatic transmission when it goes on sale in April, and will come with a seven-year factory warranty, the longest coverage in the business.

"We believe there are buyers out there for these types of cars, there hasn't been the choice before," said Kia Australia spokesman Kevin Hepworth.

Previously, the cars at the cheapest end of the market were bare bones basic but now they're picking up creature comforts from more expensive models.

The top-seller among the tiny-tots, the Mitsubishi Mirage, will arrive in showrooms with a new look and Apple CarPlay within the next two months.

In the meantime, buyers can pick-up a bargain with the superseded Mirage starting from just $13,490 drive-away.

The second-best seller in the class, the Suzuki Celerio, will also keep the pressure on prices, continuing with its unbeatable $11,990 drive-away for a manual and $13,990 drive-away for auto.

The small car specialist also plans to introduce the box shaped Suzuki Ignis by the end of the year, priced below $15,000 and come equipped with Apple CarPlay.

Would you consider a cheaper small car over a more expensive SUV? Let us know in the comments below.

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