Meet the car that's leading the way in changing the view Americans have of subcompacts. Of course, rising gas prices have something to do with this change of heart, but the Honda Fit is an excellent little car that proves that "small" doesn't have to equal "chintzy penalty box." When the Fit was introduced last year, dealers struggled to keep the car in stock as demand consistently remained high for this versatile, sporty four-door hatchback. The same will likely hold true for this year, so don't expect to get a significant discount. But rest assured, the 2008 Honda Fit's popularity is well earned.

There are two key components to the Fit that make it so desirable. The first is its lithe, athletic nature, which makes you forget the vehicle you're piloting is a $15,000 small hatchback. The Fit is simply fun to drive, and its 109-horsepower engine is an eager partner to motivate the car's 2,500-pound mass. The second component is its hatchback body style and versatile interior. The four-door Fit can comfortably seat four people and boasts a tremendous amount of storage space. Its nifty backseat folds flat and features a seat bottom that flips up for a variety of different cargo configurations. Of course, the Fit's thrifty fuel economy also aids its cause.

Unfortunately, that thriftiness is somewhat offset by an MSRP that's noticeably higher than those of the Fit's main competitors. The Fit is also an older design -- although in its second year here in North America, it has been sold elsewhere in the world since 2001. (A redesigned model is expected for 2009.) Nevertheless, we still consider the 2008 Honda Fit to be a class leader among a fresh crop of subcompacts that includes the Kia Rio5, Nissan Versa and Scion xD. We were incredibly pleased with a Fit we had in our long-term test fleet, as it proved to be an enjoyable companion for both city jaunts and highway road trips. It certainly changed our opinion of subcompacts.

The 2008 Honda Fit is a subcompact four-door hatchback available in two trim levels: Fit and Fit Sport. The base Fit comes standard with 14-inch steel wheels, air-conditioning, full power accessories, a tilt steering wheel, a fold-flat and flip-up 60/40 rear seat and a four-speaker stereo with CD player. The Fit Sport adds 15-inch alloy wheels, foglights, underbody and rear spoilers, keyless entry, cruise control, a leather-wrapped steering wheel and a six-speaker stereo with CD/MP3 player and an auxiliary audio jack. The Fit has no factory options.

Underneath the hood is a 1.5-liter four-cylinder engine driving the front wheels. It's capable of 109 hp and 105 pound-feet of torque. A five-speed manual transmission is standard and a five-speed automatic is optional. Sport models with the automatic transmission feature steering-wheel-mounted paddles for sequential shift control. Revised 2008 fuel economy ratings for the Fit are roughly 27 mpg city and 34 mpg highway, with a 1 mpg difference in either direction depending on transmission.

All 2008 Honda Fits come standard with ventilated front disc brakes and rear drums. ABS is also standard, as are front-seat side airbags and full-length side curtain airbags. In government crash tests, the Fit earned a five-star (out of five) rating for protection of front passengers in frontal and side crash tests. It received three stars for rear side protection. The Insurance Institute for Highway Safety gave the Fit its highest possible rating of "Good" for frontal-offset and side crash protection.

Like all subcompacts, the 2008 Honda Fit is highly maneuverable and a great urban runabout. Where the Fit rises above the rest is the way that it actually drives. Because of its approximately 2,500-pound curb weight and wonderfully direct steering, the Fit feels light and nimble while cornering. Its light weight also helps provide quick acceleration for this class -- we tested a Fit Sport with a manual transmission going from zero to 60 mph in 9 seconds. Although we'd pick the manual, the Fit Sport's available automatic with shift paddles is a decent alternative and a distinctive feature among subcompact economy cars. One of our few complaints with the Fit regards engine noise at highway speeds. Overall, though, the Fit provides about as much fun as you can have in a thrifty little car.

Read our Honda Fit Sport Long-Term 20,000-Mile Test

The Honda Fit's interior is intelligently designed with a control layout so simple, a caveman could use them (no offense). Although the Fit is coming to the end of its lifecycle, materials quality is near the top of its class and the design is still fresh. Unfortunately, the driver seat is awkwardly set and there's no telescoping steering wheel, making the Fit uncomfortable for many drivers.

More impressive, though, is the car's innovative rear seat and cargo area. By locating the gas tank under the front passenger seat, the rear seat can fold flush to match the low load floor. Doing so provides 41.9 cubic feet of cargo space -- positively huge for a subcompact car. The rear 60/40-split "Magic Seat" features a seat bottom that folds up, allowing additional storage space for bikes, shopping bags or other large items. It also provides a safer place for a dog to sit without getting fur all over the cloth upholstery. For human travelers, the rear seat provides as much space as does the larger Civic.