A police officer said Tuesday that the explosives-laden car, which was left in a parking lot in the Shiite-dominated district of Karradah, exploded late Monday.
He says up to 28 people were wounded and at least 15 cars were damaged.
A medical official confirmed the casualty figures. Both officials spoke on condition of anonymity as they were not authorized to release the information, the Associated Press reported.
In an online statement, Daesh terrorist group claimed responsibility for the attack. The Associated Press could not verify the authenticity of the statement, but it was posted on militant websites commonly used by the extremists.
In July, a Daesh-claimed bombing killed nearly 300 people in Karradah.