The smallest car for sale in the U.S. market has earned the highest rating in front-end and side-impact testing by the Insurance Institute for Highway Safety.

The 2008 Smart Fortwo's seat and head restraints also earned the second highest rating of  "acceptable" for protection against whiplash in rear impacts.

"The Smart engineers have done their homework," IIHS spokesman Russ Rader told CTV's Canada AM on Wednesday. "They've designed safety into a very small package."

The IIHS classifies the Smart Fortwo as a micro-car, meaning it's smaller even than mini-cars such as the Mini Cooper.

Frontal ratings can't be compared across weight classes, says the IIHS.

That means a small car that earns a good rating isn't safer than a large car that's rated less than good.

Still, Rader said the Smart car is ideal for a certain demographic of drivers.

"If you're someone who just drives in dense, city traffic where speeds are low and high-speed crashes are rare, then a small car may be practical," he said.

Rader said if drivers decide to go with a small car they should research the standard equipment that comes with the vehicle.

The Smart Fortwo includes seat-mounted combination side airbags designed to protect both the heads and chests of the driver and passenger.

It also has an electronic stability program which helps avoid accidents in the first place, said Rader.