2007 Toyota Matrix XR 4dr Hatchback (1.8L 4cyl 5M)
I have two kids, and this car fits my family perfectly. Cavernous? No, but plenty large for a family of four and everything that travels with it. I love the comfortable seats, the high seating position, the interior space (headroom in particular) and the incredible gas mileage. You won't find a better value in this price range, all things considered.
Comfortable seats, well-finished interior, great gas mileage, perfect size.
An auxillary input would be nice on the otherwise fine stereo. Also, the key fob will not lock the doors until they are all closed. Kids can be slow getting out of the back seat, and you can't lock the car until all four doors are closed. You'd be suprised how annoying that minor detail is!