Small wagons and hatchbacks are a common sight in Europe, a reaction to the continent's often narrow and congested streets and higher fuel prices. In the United States, narrow streets aren't a problem, but higher fuel prices have certainly elevated the popularity of these vehicles as of late. All-new last year, the Dodge Caliber was introduced as a replacement for the Neon. Dodge hopes this four-door hatchback can meet the needs of car buyers eager for reasonably roomy transportation that isn't too thirsty at the pump.

The 2008 Dodge Caliber shines in certain respects. Those who favor styling with an aggressive edge will enjoy its looks. Huge headlights, a crosshair grille and testosterone-laden fenders call to mind the Dodge Ram, and available 18- and 19-inch wheels only add to the Caliber's swagger. Inside, you'll find a versatile interior that's a good fit for passengers and cargo; there's seating for five, along with available 60/40-split fold-flat rear seats. The Caliber also boasts distinctive features like liftgate speakers that flip down for tailgate party entertainment, a chilled glovebox for beverages and a handy center armrest-located flip-out storage area that's meant for a cell phone or digital music player. Dodge also offers a wide range of engines in the Caliber, and available all-wheel drive makes it a trusty companion in rough weather.

Unfortunately, we've found that the Caliber also comes with some notable flaws. Chief among these is acceleration; the wagon's mainstream engines, when paired to the continuously variable transmission (CVT), simply don't offer enough get-up-and-go. In testing, we found that an all-wheel-drive R/T model took 10.1 seconds to reach 60 mph, a slower than average time for this class. The R/T's fuel economy is also below par. The 1.8-liter or 2.0-liter engines offer better gas mileage, but acceleration is less than impressive. The look and feel of the Caliber's interior is another problem. Build quality on our test vehicle was disappointing, and many of the plastics are hard and lacking in quality. The Caliber has many safety features, but Dodge makes front-seat side airbags and stability control optional on almost all trims.

A discussion about the 2008 Dodge Caliber wouldn't be complete without a shout-out to the Caliber SRT4, this year's new performance variant. With a starting price in the low $20s, the SRT4 boasts a 285-hp turbocharged engine and goes from still to 60 in 6.2 seconds. Despite offering lots of horsepower for a very affordable price, the Dodge Caliber SRT4 fails to win our wholehearted recommendation. Burdened by its excessive curb weight and abundance of torque steer, it's not nearly as engaging as it should be in hard-driving situations.

As you can probably gather, we're not terribly fond of the Dodge Caliber, and we suggest shopping around if you're interested in a small wagon or hatchback. You'll get more driving excitement from the sporty Mazda 3, more interior room from the spacious Scion xB (along with a killer sound system) and more refinement from the incredibly polished Volkswagen Rabbit. If you're considering the high-performance Caliber SRT4, know that we again prefer the Mazdaspeed 3, as it's just as quick and offers more engaging handling.

The 2008 Dodge Caliber is a compact four-door hatchback. Buyers have a choice of four trims: SE, SXT, R/T and SRT4. The budget-priced SE is leanly equipped, with 15-inch wheels and a CD stereo with an auxiliary input jack; if you want features like air-conditioning or power windows and mirrors, you have to get them as options. With the midgrade SXT, the picture improves. Its standard features list adds 17-inch wheels, keyless entry, cruise control, a 60/40-split rear seat that folds and reclines, a fold-flat front passenger seat and a 115-volt outlet. Spruce up your SXT with options such as a sunroof, a navigation system, heated front seats and color-keyed instrument panel trim. Dodge also offers upgraded audio choices in the form of a six-disc CD changer, a special Boston Acoustics MusicGate speaker package and satellite radio.

The Caliber's R/T trim brings even more to the party, with standard features such as 18-inch alloy wheels as well as many of the SXT's optional features. The R/T also comes with a sport-tuned suspension and steering rack. Options include leather seats and 18-inch chrome-plated wheels. The performance-oriented SRT4 trim adds a high-output turbocharged engine, a unique hood with an aggressive-looking (and functional) air scoop, 19-inch wheels, sport seating, a lowered suspension, and upgraded brakes with vented front rotors. Options on the SRT4 include a display that shows performance metrics like braking distance and 0-60-mph acceleration times.

The Caliber offers a wide range of engines. Front-drive SE and SXT models come standard with a 1.8-liter, four-cylinder engine rated at 148 hp and 125 pound-feet of torque. A 2.0-liter engine is an optional upgrade; it makes 158 hp and 141 lb-ft of torque. The Caliber R/T comes with a 2.4-liter engine good for 172 hp and 165 lb-ft of torque. The R/T is also the only Caliber available with all-wheel drive. The high-performance Caliber SRT4 is front-wheel drive and packs a 2.4-liter turbocharged engine good for 285 hp and 265 lb-ft of torque.

In terms of transmissions, the 1.8-liter engine comes paired to a five-speed manual only. The front-wheel-drive R/T also has a five-speed manual transmission. Both 2.0-liter engine and R/T AWD models come standard with a CVT, which is typically more fuel-efficient than a traditional four-speed automatic. With the SRT4, you get a six-speed manual transmission. According to revised EPA fuel economy estimates, an SXT with the 2.0-liter engine offers 23 mpg city/27 mpg highway, which is about average for this segment. An R/T AWD has a 21/25 mpg rating.

Dodge Caliber SE and SXT models have disc brakes in front and drums in the rear. Antilock brakes are a stand-alone option on these trims, but they're included free of charge if you order the 2.0-liter engine and CVT. R/T and SRT4 models have four-wheel disc brakes and standard ABS. All Dodge Calibers come standard with head-protecting side curtain airbags for all outboard passengers. There's also a standard knee-blocker airbag for the driver. Front-seat-mounted side airbags are optional. Stability control is standard on the SRT4, but optional on all other Calibers. In National Highway Traffic Safety Administration evaluations, the 2008 Dodge Caliber scores a perfect five stars in both front- and side-impact crash tests. In the Insurance Institute for Highway Safety's frontal-offset and side-impact tests, the Caliber earned the top rating of "Good."

Driving the 2008 Dodge Caliber is not an especially pleasant experience, even by the standards of budget-priced hatchbacks and wagons. Acceleration is unimpressive, whether you stick with the base 1.8-liter or ante up for the 2.4-liter in the R/T model, and all of the engines have an unrefined power delivery.

Another issue has to do with the CVT. In other vehicles, drivers often don't notice the difference between a CVT, which has no distinct shift points, and a regular automatic. However, in the Dodge Caliber, that difference is plain as day: More than any other we've experienced, the Caliber's CVT had the effect of severing the link between driver and power plant. The result is sluggish acceleration and considerable noise as the engine stays at high rpm. Those who crave a sense of connectedness with the road will likely be disappointed.

Dodge's wagon has a smooth ride quality on city streets but rarely generates much excitement for the driver, even in R/T trim. The SRT4 offers lots of brute force, but its heavy curb weight and abundant torque steer make it less entertaining than other high-performance options in this price range.

With its hatchback design, the Dodge Caliber is tailor-made to accommodate most daily tasks. It can seat up to five people, though putting three adults in back will likely result in grumbles about a lack of comfort for the center passenger. The rear seat can be lowered to create a flat load floor, and the rearmost part of the cargo load area is made of vinyl for easy cleaning. With the seats lowered, the Caliber can carry up to 48 cubic feet of cargo. The front seat also folds forward on most models. Dodge is particularly proud of the ChillZone, a special cooled beverage box that's integrated into the glovebox on all Calibers equipped with air-conditioning. In our experience, this feature seems to work best with the A/C on full blast.

You'll likely find the Caliber's interior lacking in terms of materials and construction. The plastic dash has a textured surface, but it still looks and feels too cheap, even for an economy hatchback. The cheap feeling also goes for the unpadded door panels and center console. When combined with the uncomfortably shaped front headrests, these issues can hamper comfort on longer drives.