Buyers turn to smaller cars as new vehicle prices stay elevated

Smaller vehicles are gaining major traction in the market amid the overall elevated costs of new trucks and SUVs.

First things first: A report by the Wall Street Journal reveals that sales of smaller, entry-level cars, such as the Honda Civic and Nissan Sentra have surged 23% or more through November, while sales of larger vehicles have slightly declined.   

• Sales of midsize SUVs – a popular segment among buyers with families – have fallen 2.3% over 2023, according to the research firm Motor Intelligence. 

• Large pickup trucks – which have yielded high profits for Detroit automakers – have seen a sales decline of 1.9%, according to the report.   

Between the lines: With the average listing price for a new vehicle being more than $10,000 higher than 5 years ago, the cost for larger SUVs and pickup trucks makes the vehicles less of an option for price conscious buyers than they’ve been in years past.  

• The average starting price for the “best” fullsize SUVs for 2024 and 2025 listed by Kelley Blue Book (across 10 models) is $64,363. 

• For fullsize pickups  7 models), the average price is $46,100.

• And the average price for the “best” midsize cars (9 models) is $29,847.

Bottom line: For some buyers, larger vehicles – specifically large SUVs and pickups – are the only option, given their specific needs. A compact or midsize car or even a crossover, for that matter, doesn’t provide them with the overall functionality they need from a vehicle. However, for a growing number of other buyers, the idea of purchasing a large SUV or pickup has become a lot less feasible, requiring many to downsize.

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