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Americans downsize to small SUVs

The so-called compact crossovers are now the third most popular category, behind mid-size cars and compacts.

By MSN Money Partner May 2, 2012 3:08PM
This post comes from AnnaMaria Andriotis at partner site SmartMoney.
 
SmartMoney on MSN MoneyDespite rising gas prices, Americans are still buying SUVs -- just smaller ones. Though car sales were mixed in April, so-called compact crossover SUVs -- like the Honda CR-V and Toyota's RAV4 -- continue to gain traction with consumers.
 
Image: Car salesman showing couple new silver hatchback in car showroom © Juice Images/Cultura/Getty ImagesWhile official data still aren't available, sales of these slimmer SUVs likely rose 20% in April compared with a year ago, says Jesse Toprak, vice president of market intelligence at TrueCar.com.
 
In March, compact crossovers became the third most popular car category, according to data from Kelley Blue Book. They now make up about 11.2% of total U.S. car sales, just behind compact cars at 14.1% and mid-size cars at 18.8%. (Post continues below.)
Though many expected consumers to flock toward hybrids and other highly fuel-efficient vehicles, car experts say consumers are turning to compact crossovers because they provide a middle ground. Crossovers are roomy enough to take the whole family on long trips but don't guzzle as much gas as larger SUVs or pickup trucks, says Alec Gutierrez, senior market analyst at KBB. The vehicles are favored by a variety of consumers, including first-time car buyers and consumers who are downgrading from bigger vehicles.

 

Shifting tastes catapulted sales of compact crossovers at a time when many other car segments are losing ground. Compact crossovers accounted for just 5.7% of all car sales -- or roughly 973,000 sales -- in the U.S. in 2005, but that figure has been rising ever since to 1.4 million, according to KBB. It's also the only car segment that has consistently increased its market share each year over that time period.

 

For consumers who are comparison shopping, the fuel efficiency of compact crossovers is competitive with many smaller vehicles. The Honda CR-V 2012, for instance, gets 26 miles per gallon combined (city and highway driving) while the Honda Accord gets 27 miles per gallon.

But consumers expecting to find deals on these models could be disappointed. In general, car incentives are down to their lowest level since October 2005, according to Edmunds.com. That's largely because of the growth of car sales and the limited inventory that's left fewer cars lingering at the dealerships.

 

Some compact crossovers do come with incentives, however, though they vary by location. The 2013 Ford Escape comes with up to $750 in cash rebates and the 2012 Toyota RAV4 comes with up to $500, according to Edmunds.com. And experts caution that as demand for these cars continues to grow, incentives will likely become harder to find.

 

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