The recent GST 2.0 reform has come as welcome news for car buyers across India. With the government slashing GST on small, mass-market cars from 28% to 18%, manufacturers have quickly passed on the benefits. The result? Popular hatchbacks and entry-level cars have become significantly more affordable. For budget-conscious buyers, this means more choice under the crucial ₹5 lakh mark—a segment that caters to first-time car owners, students, and families looking for a practical second vehicle.
Here are five cars that now stand out as top picks under ₹5 lakh after the GST cut.
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| Model | Starting price (ex-showroom) |
|---|---|
| Maruti Suzuki Alto K10 | ₹3.70 lakh onwards |
| Maruti Suzuki S-Presso | ₹3.50 lakh onwards |
| Maruti Suzuki Wagon R | ₹5 lakh onwards |
| Tata Tiago | ₹4.57 lakh onwards |
| Renault Kwid | ₹4.30 lakh onwards |
1. Maruti Suzuki Alto K10
Always a crowd favourite, the Alto K10 was already one of India’s most affordable hatchbacks. With prices starting around ₹3.70 lakh before the tax cut, it has become even more attractive post-GST. Compact, fuel-efficient, and easy to maintain, the Alto K10 is ideal for city use and first-time car buyers. It is available with just a petrol and a CNG powertrain.
2. Maruti Suzuki S-Presso
The S-Presso, known as a micro-SUV for its tall stance and bold design, has also seen its price dip further. Now, it has a starting price of around ₹3.50 lakh ex-showroom. It combines practicality with quirky styling, and thanks to the GST benefit, it cements its position as one of the cheapest cars you can buy new in India. Moreover, because of its tall stance, the driver gets a good view of what is ahead. It is also available with a petrol and a CNG powertrain.
3. Maruti Suzuki Wagon R
{{/usCountry}}The S-Presso, known as a micro-SUV for its tall stance and bold design, has also seen its price dip further. Now, it has a starting price of around ₹3.50 lakh ex-showroom. It combines practicality with quirky styling, and thanks to the GST benefit, it cements its position as one of the cheapest cars you can buy new in India. Moreover, because of its tall stance, the driver gets a good view of what is ahead. It is also available with a petrol and a CNG powertrain.
3. Maruti Suzuki Wagon R
{{/usCountry}}A trusted family hatchback, the Wagon R now starts at just ₹5 lakh ex-showroom. Its tall-boy design, roomy cabin, and Maruti’s service network make it a great value buy for families. Apart from this, there are multiple powertrain options, including a CNG and an automatic gearbox available.
(Also read: Honda CB350C vs Royal Enfield Bullet 350: Price, specs and features compared)
4. Tata Tiago
The Tata Tiago has always been praised for its strong build, good safety features, and modern design. The prices of the Tiago now start at ₹4.57 lakh ex-showroom. For those who want more substance, style, and safety without stretching the budget too far, the Tiago is one of the strongest contenders. Apart from having multiple powertrains and gearboxes on offer, the Tiago is the only one that pairs CNG with an automatic gearbox, combining effciency with ease of shifting gears.
5. Renault Kwid
Renault’s Kwid, starting around ₹4.30 lakh ex-showroom, will now become even more popular among buyers who are on a budget with its SUV-inspired looks, touchscreen infotainment, and easy driving dynamics making it an appealing choice for urban buyers. Customers can opt for the 5-speed manual gearbox or an AMT unit, both of which come mated to a 1.0-litre petrol engine.