Is it

>! a tape deck?

The bigger I am, the less I will hold. No one else would be so bold.

>! Bigger 8 tracks hold less than smaller cassettes.

I get comfy in the car, as we travel real far.

>! Tapes recede into the tape deck

I used to get used a whole lot. Now, nobody gives a squat.

>! Nobody uses them any more.

It's clear when I fail, you'll hear folks wail.

>! Hearing a tape get eaten is an earful.

I was popular in the eighties. I sure miss my Mercedes.

>! Tapes were popular in the 80's.

---

Old, incorrect guess:

>! legroom/trunk