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1) Because it is easier to load and unload the luggage if it is low down. If it was on top of the passengers you would need a ladder.

2) Because if the luggage was at the top of the bus, the bus would become top-heavy, and the luggage would tend to move more when the bus went around corners.

3) Because this allows the passenger compartment to be higher and above the wheels. Otherwise the wheels would interrupt the passenger compartment (this is what happens on a low-floor bus). The luggage compartment is between the wheels, not the full length of the bus.

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