Home & Family Finance
New Cars: SUV or Sedan?
/ November 14th, 2016
If you’re shopping for a new sedan, would you pay a bit more for a small SUV that gives you more space and versatility?
Increasingly, Americans are answering “yes” to that question. Starting in 2014, compact SUVs like the Honda CR-V and Ford Escape displaced midsize sedans as the top-selling automotive category. In 2016 through July, these small SUVs have sold a total of 1.76 million vs. 1.27 million for midsize sedans.
What powered this switch? The sudden decline of gas prices in 2014 from the nearly $4 a gallon level led people to be less concerned about fuel economy and thus open to consider SUVs, says analyst Tim Fleming of Kelley Blue Book. The subsequent small increase in gas prices has not been enough to change this incentive.
But unlike large SUVS, with these compact utilities you don’t pay that much of a gas mileage penalty. The combined city/highway mileage rating for this category is 25—trailing midsize sedans by less than 4 (miles per gallon) MPG.
The appeal of these small SUVS ranges from 20-something professionals who want to haul their skis and other gear to retirees who want plenty of space for groceries and grandkids. “The combination of practicality, comfort, and affordability that these vehicles have is hard to match,” says analyst Fleming.
The average selling price recently of compact SUVs is about $27,600, according to Kelley Blue Book. That compares with $25,100 for midsize sedans. That price differential matters to many buyers, however, and Fleming predicts that automakers will continue to sell about two million midsize sedans annually.
For the price-conscious buyer, compact cars like Honda Civic or Toyota Corolla will be an attraction at an average selling price of $20,150. And unlike years past, these small sedans now feature the latest in automotive technology and safety features.
But if you are a buyer considering a compact SUV, for an example we take a closer look at the top seller—Toyota RAV 4-and compare it to the Toyota Camry. Other top selling compact SUVs include Honda CR-V, Ford Escape, Nissan Rogue, and Chevrolet Equinox.
TOYOTA RAV4 vs. TOYOTA CAMRY
This comparison pits the best-selling compact SUV vs. the best-selling sedan in the U.S. Reviewers praise the RAV4 for its comfortable ride and crisp handling. The list price range for the RAV4 is $24,350 to $32,920 while the Camry starts at $23,070 and goes up to $31,370. In gas mileage, the Camry has the edge. Its four-cylinder engine is rated for 25 MPG in city driving and 35 on the highway, 28 combined. But the RAV4 is rated for a very respectable 23 in the city, 30 on the highway, 26 combined. The cargo space numbers, however, show you the real RAV4 advantage. The Camry trunk will handle 15.4 cubic feet. The RAV4 with the seats up offers 37.2 cubic feet and with the rear seats folded 70.9. That is a lot of luggage or supplies from Home Depot.