Creating the illusion of an expansive cabin in the body of a subcompact hatchback, the 2008 Honda Fit is all about its Magic Seat. But this trick actually works. The rear seat is able to split-fold like that in normal cars, but the seat bottoms can also flip up to create a versatile use of space and expand the cargo area from 21 to 41 cubic feet. The flat floor is lower than that of other Hondas because of the location of the fuel tank, giving the Fit the impression that it has more leg and headroom than the slightly larger Civic.

For 2008, the Honda Fit remains unchanged, except for a now-standard tire monitor. Base trims start with full power features, intermittent front and rear wipers, a CD player, air conditioning, ABS brakes, dual front and side curtain airbags for both rows, and 14-inch tires. The Sport model adds mostly flash, with paddle-shifters (on automatics only), a body kit, foglights, a leather steering wheel, cruise control, and an MP3 player with iPod hookup. Performance-wise, it comes with 15-inch wheels and a rear spoiler. Both trims feature a slightly underpowered 1.5-liter, 109-hp inline four with choice of a 5-speed manual or automatic, but owners say the 2008 Fit's steering and handling are quick and responsive and are willing to sacrifice some acceleration power for the Fit's 28/34 mpg.

The 2008 Fit makes a good city car, thanks to its easy maneuverability and 157-inch length (great for parking). Highlights include its large cargo capacity, which, even with the seats up, is 21 cubic feet, nearly as much as that in the Element. And the price is right for budget-minded owners looking for a hassle-free ride. The most common complaints include some road noise, no center armrest, and the lack of options. A redesign is set for late 2008, with a longer wheelbase and the possible introduction of a hybrid version.