If you are short on funds but need to find the perfect vehicle, you have stumbled on to the perfect place.  

Today, India's car market offers a diverse array of options for budget-conscious buyers under 5 lakhs. Ideal for first-time buyers, small families, students, and city commuters, these cars are economical and practical. 

These budget-friendly cars excel in fuel efficiency, seating capacity, compact designs for crowded roads, and decent safety features like airbags and anti-lock brakes, balancing affordability with essential features.

When buying a car in India, securing car insurance is also crucial as it is mandatory by the Motor Vehicles Act of 1988. It provides financial protection against accidents, theft, and damages, safeguarding your investment. Having car insurance saves you from hefty traffic fines, license suspension, and even legal trouble. 

Here we list out the best cars in India within 5 lakhs. Have a look at the models below and check which of them suits your unique needs properly. Let’s get started! 

Here are some of the most desirable cars under this price segment. All prices here are the ex-showroom price in Delhi.

1. Maruti Suzuki Alto K10 | Starting ₹4.23 Lakh

The Alto K10 is available in 4 distinct variants, with both manual and automatic transmission options. You can even choose from up to 6 different shades when picking the car. 

At present, petrol and CNG engines power this vehicle with either a 5-speed manual transmission or a 5-speed AMT. Moreover, the 214-litre boot space can also prove to be handy.

An all-time favorite for first-time car buyers, the Alto K10 is small, convenient, and ideal for navigating city traffic. Its light steering and compact footprint make it an excellent daily driver, especially in crowded urban environments. The boot space also adds decent practicality for weekend shopping or short trips.

Key Specifications:

• Engine displacement: 998 cc
• Mileage: 24.39 - 24.9 kmpl
  
• Seating capacity: 5
• Transmission: Manual/Automatic
• Fuel type: Petrol/CNG
• Body type: Hatchback
  
• Airbags: 2
• Ex-showroom price: ₹4.23 - ₹6.20 lakhs
• Safety features: Dual airbags, ABS with EBD, and a driver-side airbag standard in some variants of the Alto K10

2. Maruti S-Presso | Starting ₹4.26 Lakh

The S-Presso is another pocket-friendly hatchback option to consider if you are looking for the best car under 5 lakhs in India. The petrol model is capable of generating up to 68 PS of power.

Only the VXi variant of this vehicle comes with an automatic transmission, while the others, such as the Std and LXi models, sport a 5-speed manual gearbox.

Styled with a mix of hatchback affordability and SUV-like attitude, the S-Presso has a rather bold, upright stance that will attract younger buyers. Its higher ground clearance and compact size offer flexibility on rough roads without compromising fuel efficiency or ease of parking.

Key Specifications:

• Engine displacement: 998cc
• Mileage: 24.12 - 25.3 kmpl
• Seating capacity: 5
  
• Transmission: Manual/Automatic
• Fuel type: CNG/Petrol
• Body type: Hatchback
• Airbags: 2
  
• Ex-showroom price: ₹4.26 - ₹6.12 lakh
• Safety features: Reverse parking sensors, dual front airbags, ABS with EBD are important considerations for buyers in the S-presso.

3. Renault Kwid | Starting ₹4.70 Lakh

Another option to consider when looking for the best car under 5 lakhs in India is the Renault Kwid. Although this car has several variants, each of them sports a petrol engine. 

The latter option comes with a 5-speed transmission system. Power and torque ratings are limited to 54 PS and 72 Nm, respectively.

The Renault Kwid stands out in its segment with SUV-inspired styling and a feature-packed cabin. It provides a raised seating position and digital dials, giving a premium feel at a budget-friendly price. Its "tall-boy" design with a high roofline provides enough headroom and a confident road presence.

Key Specifications:

• Engine displacement: 999 cc
• Mileage: 21.46 - 22.3 kmpl
• Seating capacity: 5
• Transmission: Manual/Automatic
• Fuel type: Petrol
• Body type: Hatchback
  
• Airbags: 2
• Ex-showroom price: ₹4.70 - ₹6.45 lakh
• Safety features: Electronic stability programme (ESP), hill start assist (HSA), tyre pressure monitoring system (TPMS), etc., along with other standard safety features

4. PMV EaS E | Starting at ₹4.79 Lakh

The PMV EaS-E, developed by Indian startup PMV Electric, is a compact electric car ideally suited for city traffic. It is a comparatively cheaper and also environmentally friendly transport system for individuals who live in cities. 

Due to the compact dimension of the vehicle, the EaS-E is suitable for use on crowded roads and narrow parking lots for day-to-day commuting. This vehicle targets comfort and usability as the primary selling point for people who are interested in using electric cars for their daily transportation needs.

The PMV EaS-E reimagines urban commuting with its fully electric setup and ultra-compact form factor. Designed for solo travelers or city couples, it focuses on ease of use, low running costs, and futuristic features like cruise control and regenerative braking in a tiny package.

Key Specifications:

• Engine Displacement: 1,199 cc
• Mileage: 160 kmpl
• Seating Capacity: 2
• Transmission: Automatic
• Fuel Type: Electricity
• Body Type: Hatchback
• Airbags: 1
• Ex-Showroom Price: ₹4.79 Lakh
• Safety Features: Rear view camera, front disc brakes, cruise control, and parking assist are important considerations for buyers.

5. Tata Tiago | Starting ₹5.00 Lakh

The Tata Tiago is one of the most features packed hatchbacks in India as it comes with a premium look, and good features too with a high safety rating and numerous variants to cater needs.

It’s available in petrol and CNG options, with both manual and AMT gearboxes. Inside, the Tiago offers a spacious cabin, a 242-litre boot, and modern features like a touchscreen infotainment system and steering-mounted controls.

Tata also offers the Tiago in vibrant colors, giving it a youthful edge. It remains a dependable daily commuter in this segment, with a sturdy build and strong after-sales support.

Key Specifications:

• Engine Displacement: 1,199 cc
• Mileage: 19 - 26.49 kmpl
• Seating Capacity: 5
• Transmission: Manual/Automatic
• Fuel Type: Petrol/CNG
• Body Type: Hatchback
• Airbags: 2–6 (depending on variant)
• Ex-Showroom Price: ₹5.00 - ₹8.44 lakh
• Safety Features: Dual front airbags, ABS with EBD, rear parking sensors, corner stability control, and a Global NCAP 4-star safety rating