I'm currently on a 'toddler blankey' kick, and mine are 32 by 42 inches at least. I want them to last well into their toddler years. But if it's just for the car, maybe 24" by 30" would do? You will have to decide for yourself, according to your own judgment of what it's for, how long it will last.
Some people knit small ones for diaper-changing. My mini-cat (5 years old, weighs 9 pounds) loves small squares to sit and lie on.