Sales of smaller cars and compact SUVs have been on the rise this year with more shoppers giving priority to affordability

Stubbornly high car prices and elevated interest rates are persuading more Americans that when it comes to their next car purchase, bigger isn’t always better.

U.S. car buyers have for years gravitated to larger, roomier vehicles, a shift that had become so pronounced last decade that some automakers killed off their small-car and sedan models because of slumping sales.

But with the average monthly payment for a new car soaring to new heights in recent years, some car shoppers are moving back in the other direction.

Sales of some smaller, entry-level models, such as the Honda Civic and Nissan Sentra, have taken off this year, rising 23 percent or more through November, according to research firm Motor Intelligence. Those increases have far outpaced the industry’s growth, which has been in the low single digits this year.

Meanwhile, large pickup truck sales, long a highly profitable corner of the market for the Detroit car companies, slid 1.9 percent, data from car-shopping website Edmunds shows. Sales of midsize SUVs, the type of vehicle typically favored by families, have also declined, falling 2.3 percent over 2023.

This rising interest in smaller offerings comes as owning a car has become increasingly unaffordable. The average selling price of a new car is still at historically high levels, exceeding $45,000 in November, according to J.D. Power. Insurance premiums, financing rates and repair costs have also climbed in recent years, further stretching household budgets.

As expenses have ticked higher, some buyers have become more willing to make a trade-off, sacrificing size and space for a lower monthly payment, analysts say.

“They need the functionality that the vehicle has, but they just need to buy the smaller size,” said Charles Chesbrough, a senior economist at Cox Automotive. “It fits into their wallet.”

Whether the trend continues might depend on interest rates and fuel prices in the coming years. President-elect Donald Trump’s pledge to slap 25 percent import tariffs on goods made in Mexico and Canada could further dent affordability, as many automakers build their lower-priced cars in Mexico to take advantage of reduced labor costs.

The price differential between a large and small model can be significant. The average price paid for a small SUV this year was about $29,000, according to Edmunds. For midsize and large SUVs, consumers paid on average $48,000 and $76,000, respectively.

Toyota, Honda and other Asian brands are some of the biggest beneficiaries from this shift, having long led the market for compact sedans and SUVs, some with starting prices under $25,000. Many of these companies stood by their small-car options as rivals abandoned the category.

Some nameplates, such as the Mazda3 and Honda HR-V, have posted double-digit sales increases this year. 

In the compact-car category alone, sales rose 16 percent through November, and U.S. market share for these types of models has bounced back, after sliding in recent years, data from Edmunds shows. 

Sales of compact and subcompact SUVs have also gotten a lift, up 11.5 percent over the same period, as car companies have expanded the range of options for buyers looking for utility and a higher-riding position in a smaller package. These models now account for about 27 percent of all U.S. sales this year, up from 22 percent before the pandemic.

Large SUV sales also remain a growth spot, but that is largely because the families who tend to buy them need the extra space or hauling capability and can’t easily downsize, analysts say.

With lower price points and better fuel economy, compact cars were once seen as a way of attracting younger buyers into a brand. The strategy was to get customers hooked earlier in their life and then sell them pricier models of the same brand as they grew older and increased their spending power. 

But car shoppers began waiting until later in life to purchase new cars and trucks. Years of cheap gasoline helped cement the dominance of larger SUVs in America’s driveways and parking lots.

Automakers tuned their lineups accordingly, phasing out many sedan and hatchback models that had once been showroom staples, including well-known names such as the Ford Focus and Honda Fit.

The remaining options tend to be pricier. The number of cars priced at under $25,000 dropped to 11 this year from 45 models in 2019, according to Edmunds.

In the absence of those smaller cars, some brands have rolled out downsized SUVs at cheaper price points and designed to appeal to budget-conscious consumers.

GM-owned Chevrolet, which has discontinued nearly all its sedan models in the U.S., has found success in its diminutive SUV, called the Trax, which starts at about $20,000. Sales of the Trax jumped nearly 89 percent through November, according to Motor Intelligence.

Steven Majoros, Chevy’s marketing chief, said the Trax has resonated with consumers because it offers sought-after features, such as large media screens and advanced safety tech, at a lower price.

Some dealers have been frustrated that they don’t have much to offer price-sensitive customers.

Adam Lee, chairman of Lee Auto Malls in Maine, said he has seen trucks and big SUVs sitting around longer on dealer lots with customers looking for more affordability. It is unfortunate that many car companies trimmed the more economical parts of their lineups, he added.

“They’re like a herd of sheep,” Lee said of the car companies. “They all follow each other off the cliff.”

Write to Ben Glickman at ben.glickman@wsj.com