It's actually a little of both. And it may be just what you're looking for.
The industry term for it is a "crossover."
Like a traditional mid-sized SUV, crossovers are designed to be roomy and versatile on the inside, with ample space for cargo and (usually) seats that can be moved around to make room for even more. They also ride higher than the typical passenger car -- and are styled to appeal to people looking for a sporty, "active lifestyle" vehicle.
Most of them also have powerful engines and can keep up with sports cars when it comes to 0-60 sprints. And a few, like the 320 horsepower, V-8 equipped Infiniti FX45, are muscle car quick -- with more ponies under the hood than high-performance sports cars like the Mustang GT, Mitsubishi EVO and Subaru WRX STi (and a whole lot more trunk space).
Not coincidentally, these are the same attributes that helped launch the SUV boom back in the late 1980s and early '90s -- size/versatility/power.
The fact that 4WD-equipped SUVs could also be taken off-road was only a factor for the relative handful of owners (less than 10 percent, according to most surveys) who actually did take their vehicles off-road.
For most buyers, the typical SUV's truck-sourced heavy duty steel frame, leaf spring/solid axle suspension and truck-sourced four-wheel-drive system with two-speed transfer cases were about as useful as a 50 gallon drum of whale oil -- but they were part of the package. Buyers accepted the downsides of less-than-great handling and higher fuel consumption in exchange for the SUV's many upsides.
That trade-off's no longer necessary.
The crossover's advantages begin under the skin -- where you'll find a passenger car chassis, with a passenger car suspension system designed mainly for on-road driving, not off-road lumbering. This is why crossovers handle and stop better -- and get significantly better fuel economy, while delivering equal or better acceleration/performance -- than a similar-in-size conventional SUV.
Another crossover advantage (for most buyers) is all-wheel-drive (AWD) vs. the truck-sourced 4WD systems found in the typical SUV.
Truck-style 4WD systems typically operate in 2WD most of the time, for one thing -- with all of the engine's power going to the rear wheels only. So when the 4WD is not engaged -- which for most people is most of the time -- you're just carting around a few hundred pounds of dead weight and adding to your weekly gas bill. You've got no more traction or grip than a standard passenger car -- less, in fact. A modern front-wheel-drive car with a good set of all-season tires will handle snow and rain better than a fishtail-prone rear-drive SUV in 2WD mode.
Another point worth mentioning -- because many people are unaware of it -- is that the typical truck-based 4WD system is not designed to be engaged on dry, paved roads -- and may even be damaged if it is. These systems were designed for use on uneven terrain and for relatively low speed driving in off-road conditions -- not steady-state cruising at highway speeds or tackling corners.
AWD, in contrast, is "always on" -- automatically routing power to the wheels with the most traction, with no action required by the driver. So you get the benefits of improved traction and control at all times -- rain or shine, winter or summer. And because there is no two-speed transfer case, the AWD system doesn't pack on the pounds like truck-style four-wheel-drive system does.
The only "downside" is that AWD systems don't have the Low range gearing that you'd find in a truck-based 4WD SUV -- but that's a feature you'd only need if you were going to attempt serious off-roading (or slog through heavy mud, etc.). An AWD-equipped vehicle system can handle most dirt/gravel roads -- and snow covered highways -- as well as a 4WD SUV. And the AWD-equipped vehicle handles better, stops faster and is more stable when subjected to panic stops or sudden, accident-avoidance maneuvering.
Though current-year SUVs are far less prone to loss of control and rollover-type accidents, the risk is still higher with an SUV built on a truck-based chassis than it is with a passenger car-sourced crossover due to the built-in design differences -- in particular the SUV's higher center of gravity and its truck-style suspension system.
What all this means is that if your driving is mostly of the urban/suburban jungle type -- and about the only time you go "off-road" is when you park on the church lawn for the annual 4th of July picnic -- an AWD crossover might be a better choice than a conventional SUV.
People who need a vehicle that can tackle unpaved roads and rough terrain (or deal with heavy winter snows in rural areas where plows are few and far between) may still need the extra ruggedness offered by a traditional, truck-based SUV. But for buyers who want a roomy, versatile, fun vehicle that can handle a few snow days each year -- with better year-round handling and lower gas bills, too -- a crossover is more than just a good compromise.
It's the smart choice to make.