Small cars are back in favor, which is not surprising considering the price of gasoline. Nonetheless, many people still desire to own a car with a decent amount of interior space and adequate performance, all for a reasonable price, of course. There's nothing new about this for Europeans, as they have been used to high fuel prices for many years.

The all-new 2007 Nissan Versa arrives as an addition to Nissan's lineup and is now the smallest model you'll find in its showroom. The fact that it's partly based on the Renault Megane, a successful European small car, is a good start.

If you haven't driven a small car in some time you'll likely be pleasantly surprised at how big the Versa feels. There is decent head room, and even tall passengers will find rear seat leg room as good as that in many much larger cars or SUVs. Handling is crisp and parking is a breeze.

Initially, the Versa is only available as a five-door hatchback, but a sedan version will appear in Nissan showrooms later in the model year. Modern hatchbacks have improved considerably from the econoboxes of years gone by and the Versa is no exception with a well finished interior that includes good materials and plenty of modern conveniences and safety features.

The Versa competes with the lower priced Toyota Yaris and the more expensive Honda Fit, but it is slightly bigger than either. All three of these brand-new competitors are designed with relatively tall rooflines for increased interior comfort and visibility.

The Versa is smaller and less expensive than the 2007 Nissan Sentra, but it actually offers greater interior space and more versatility. Bottom line, the Versa is a large small car with good performance, plenty of safety features and versatility.