The interior of the Yaris has a few major flaws: 1) No cup holder between the front seats, where you want it to be. 2) A center-mount instrument panel (as with the Ion and the Scion). 3) The car's inside space feels sort of cheap and blah. Miles from the sumptuousness of the Versa.
Countering all this are the superb ride and handling of the Yaris. It has all the hallmarks of a Toyota—solid-feeling, well-engineered, and smoothly efficient. Acceleration and shifting were effortless. The car never felt strained by anything I threw at it. I just had the sense this thing would go and go for years without the slightest hitch. And that, much more than aesthetics or a comfy interior, is what I'm looking for from a budget car.
Honda Fit (2007 starting price: $13,850; 33 mpg city, 38 mpg highway) I love this car. If my '96 Saturn went belly-up tomorrow, I'm quite sure I would buy this car.
It starts with the driving experience. On the manual-transmission Fit I tested, changing gears was a total joy, with quick, smooth transitions. (I believe the applicable term here is "short throws.") Handling was fantastic, with extremely responsive steering and acceleration. The car gripped the road, had great pickup, and was more fun from behind the wheel than any of its competitors. I drove the "Sport" model of the Fit (it starts at $15,170), and it truly did feel like a scaled-down sports car.
It also excels on the comfort front. The back seats fold down flat to create a huge, open cargo space (tall and deep) in the rear of the car. Configured like this, the Fit effectively serves as a sawed-off station wagon.
As usual, in my experience with Hondas, the interior was smartly designed, with cup holders and storage compartments exactly where you want them. No center-mount instrument panel here: The Fit's panel is behind the steering wheel where it should be, and its illuminated dials are attractive and easy to read. The model I drove also featured an auxiliary jack for MP3 players and a pretty decent sound system.
Of the six cheapie compacts I borrowed, the Fit was the only car I was genuinely sorry to return. I wish I could borrow it again tomorrow, and every day after that. It's a clear champ.