diff --git a/readme.md b/readme.md
index 7c0eec84..b2c5cbc0 100644
--- a/readme.md
+++ b/readme.md
@@ -95,7 +95,6 @@ docker run -it --rm -p 5000:5000 --device=/dev/kvm --cap-add NET_ADMIN --stop-ti
 
     ```yaml
     environment:
-      ALLOCATE: "N"
       DISK_FMT: "qcow2"
     ```
 
diff --git a/src/disk.sh b/src/disk.sh
index fd68d61c..0c40089f 100644
--- a/src/disk.sh
+++ b/src/disk.sh
@@ -422,6 +422,14 @@ addDevice () {
 
 DISK_EXT="$(fmt2ext "$DISK_FMT")" || exit $?
 
+if [ -z "$ALLOCATE" ]; then
+  if [[ "${DISK_FMT,,}" == "raw" ]]; then
+    ALLOCATE="Y"
+  else
+    ALLOCATE="N"
+  fi
+fi
+
 if [[ "$ALLOCATE" == [Nn]* ]]; then
   DISK_TYPE="growable"
   DISK_ALLOC="preallocation=off"
diff --git a/src/reset.sh b/src/reset.sh
index 4d03b6f0..6aadbea9 100644
--- a/src/reset.sh
+++ b/src/reset.sh
@@ -15,7 +15,7 @@ trap 'error "Status $? while: $BASH_COMMAND (line $LINENO/$BASH_LINENO)"' ERR
 : ${DEBUG:='N'}         # Disable debugging mode
 : ${COUNTRY:=''}        # Country code for mirror
 : ${CONSOLE:='N'}       # Disable console mode
-: ${ALLOCATE:='Y'}      # Preallocate diskspace
+: ${ALLOCATE:=''}       # Preallocate diskspace
 : ${ARGUMENTS:=''}      # Extra QEMU parameters
 : ${CPU_CORES:='1'}     # Amount of CPU cores
 : ${RAM_SIZE:='1G'}     # Maximum RAM amount