The 2006 Hummer H3 is an all-new, mid-sized, five-passenger sport utility vehicle that carries the military-inspired design cues and amazing off-road capabilities of the Hummer H1 and H2, but puts them in a smaller, more affordable package. The H3 provides the level of equipment that luxury-vehicle buyers expect, even though this Hummer's base price is less than $30,000.

In an era of high gasoline prices, the appeal of the Hummer H3 is increased by its fuel economy ratings. While its larger siblings average only 10 or 12 miles per gallon, the H3 is rated at 20 miles per gallon on the highway with its standard five-speed manual transmission or 19 mpg when equipped with an optional four-speed automatic. Both transmissions are rated at 16 mpg in city driving.

The H3 draws its power from a 3.5-liter, inline five-cylinder engine that generates 220 horsepower, which we found a sufficient output to accelerate this vehicle smartly up to freeway speeds.

The H3 delivers serious off-road capability. But it also offers comfortable and quiet performance on the highway and is as capable at squeezing into tight parking spaces as it is picking its way over boulders on The Rubicon Trail. It's an impressive balance. And the pricing is compelling. Many H3 buyers will want the Luxury Package with its leather seats and upgraded audio system, the automatic transmission and electronic stability control technology. Even with side-curtain airbags and satellite radio you're looking at a vehicle that retails for less than $35,000.