(MONEY Magazine) – In Hollywood, it's Oscar season. On my calendar, it's time for another set of awards--my annual honors for the best cars of the year, for the shining stars on wheels. And this year, I'm more glad than ever that I get to drive cars for a living instead of making or selling them. While automakers and dealers are fretting about 2001, I think this model-year is shaping up as one of the best yet. More than 50 completely new and redesigned vehicles are making their way into showrooms, many of them so good they don't deserve to be overlooked, which is where this 10th annual car guide comes in. From my selection of Best Cars for 2001 to our list of more than 400 popular models, I'll help you to find a car to fit your lifestyle and to snare the best price.

First, let me tell you what the auto business is all worried about. Stock market woes and fears of a recession have slammed the brakes on auto sales in recent months. After setting sales records in 2000, the auto industry expects to sell 16 million vehicles this year, a decline of 8%. The good news is that slowing sales means generous rebates, dealer incentives and low-interest loans for car buyers. "What feels like a bad year to the auto industry will be good news for consumers," says George Peterson, president of Autopacific, a consulting firm. In fact, the average incentive per vehicle has increased 15% from a year ago to $2,400, according to CNW Marketing/Research.

Of the new cars expected to make a big splash, the most exciting looker is the Ford Thunderbird, which makes its debut in July. It has already generated plenty of buzz for its retro styling, which echoes the original and extremely popular 1954 two-seater. Also due this summer is the Jaguar X-Type, a smaller sedan than Jaguar has marketed before, which will compete in the "near luxury" category priced below $40,000.

On the SUV front there's big news too. Jeep's new mini-SUV, the Liberty, will join the competition against Ford's Escape, introduced last fall, Toyota's redesigned RAV4 and Honda's CR-V, which has an updated version due in October. Meanwhile, the 2002 Ford Explorer arrives at dealers this month with a redesign and lots of new features aimed at reversing its reputation as a troubled vehicle prone to rollovers and tire problems. And one of the Explorer's main rivals, the Chevrolet Blazer, has been redesigned as the TrailBlazer.

Car makers are also increasingly adding better safety equipment to vehicles. More cars are being equipped with side air bags and traction control systems, which help avoid skids that can lead to rollovers.

For our Best Cars for 2001, I've selected the vehicles in eight categories that I think represent the best value in today's marketplace. These aren't the cheapest buys--some are good deals, some sell at full price--but they are the vehicles that I think are the best in their class and worth every penny. They all offer plenty in the way of styling, power, ride and handling, safety, reliability and resale value. Simply put, they're a pure pleasure to drive, and I really enjoyed spending hours behind the wheel with them.

To prepare yourself for negotiating with a dealer--using my picks or your own--consult our tables on page 117. They offer detailed price data for 406 of the most popular small, mid-size, luxury and sports cars, station wagons, SUVs, minivans and pickup trucks. Your best strategy is to bargain up from the dealer's cost, or invoice price, hoping to land a target price no more than 2% to 3% above dealer's cost for most models, 4% for luxury or sports cars. If you don't want to bargain on your own, you can hire a shopper to do it for you for between $155 and $395. I've done that myself. The best of the car-buying services are CarBargains (www.carbargains.org; 800-475-7283), CarQ (www.carq.com; 800-517-2277) and AutoAdvisor (www.autoadvisor.com; 800-326-1976).

If price is your primary consideration, check out our "Great Deals" on page 114. I asked the three services above to identify vehicles that are being most heavily discounted by dealers with rebates and incentives. Out of that group, I selected six cars that I've reviewed favorably in the past and can enthusiastically recommend. Now on to the Best Cars for 2001.

If you want a sporty-looking mid-size family car... VOLKSWAGEN PASSAT

You know the dilemma. You're in your mid- to late thirties, you're married, maybe you even have a kid. You're looking for a reliable, comfortable mid-size car that won't make you feel old. In other words, a sporty yet functional car with a few nice curves, one that really responds when you hit the pedal.

Tough to find? Look no futher than the Volkswagen Passat. Like its rivals, category leaders Toyota Camry and Honda Accord--the perennial top two in sales among mid-size sedans--the Passat offers plenty in the way of creature comforts and steady reliability, which makes it a fine choice for commuting or road trips.

But the Passat has a considerable edge over its competitors in two areas: power and pizazz. Its high, arching roofline, sloping rounded nose and squared-off rear make it stand out from the crowd. That's hard to say about the utilitarian-looking Accord or Camry, which would never win design awards. Better yet, the Passat base engine is the 1.8T turbocharged four-cylinder. It produces a hefty 150 horsepower vs. 135 for the Accord and Camry base engines. It may not seem like much, but you can really feel the difference on the road, especially in Passat's crisp, responsive acceleration. The car's precise handling also lets you move swiftly through curving back roads with little fuss or drift, which is also a distinct advantage over its competitors.

It's even a winner in our safety ratings--which incorporate both government and insurance industry crash tests--with five stars. The Passat GLS can be had for about $22,100, or $1,000 over dealer cost.

If you just can't live without an SUV... CHEVROLET TAHOE

The biggest sales in the SUV arena, and the most attention, go to mid-size models like the Ford Explorer and the Jeep Grand Cherokee. As readers know, I own an Explorer and recently gave the new 2002 model a positive review. But it's not the only SUV I'm enamored of. Add the bigger Tahoe to the list.

Driving the Tahoe reminded me why SUVs became so popular in the first place. I set out for Long Island in my gold test Tahoe with the sun glinting off snow from a recent blizzard. Its 275-horsepower standard V-8 delivered smooth acceleration for lane changes at highway speeds. A new traction control feature helped keep the Tahoe steady, even when snow edged the outer lanes. At the snowy driveway of my weekend house, the traction control helped take the Tahoe effortlessly up a small hill even without having to turn on the four-wheel drive.

This Chevy is an enigma on the sport utility scene. It's bigger than the mid-size utilities, yet smaller than huge brute utes like the Chevy Suburban and the Ford Excursion. That's what makes it so attractive. It's got more room for cargo and passengers than the Explorer--its 105 cubic feet of cargo space with the back seats down dwarfs the Explorer's 88 cubic feet--and better road maneuverability than the Suburban.

Plus it's safer than most SUVs on the road today. Thanks to the relatively wide side-to-side distance between wheels, the Tahoe is one of only seven models to get three stars in recently released government ratings for rollover probability (one is worst and five is best; most SUVs got two stars).

The Tahoe is four inches lower than the Ford Expedition, its direct competitor. But it's taller than the Explorer or the Grand Cherokee. That allows for a high driver's seat that really provides a commanding view of the road and makes driving in slow traffic far more bearable. Suspension adjustments in the 2000-model redesign of the Tahoe have also made it a comfortable highway cruiser that moves smoothly with 70-mph traffic, despite its Chevy truck roots. And even more important, the Tahoe is five inches shorter in length than its rivals, making it very nimble in everyday driving, especially in tight spots like the supermarket parking lot or the gas station.

Look to buy the top-of-the-line Tahoe--the four-door LT with four-wheel drive--for about $35,000, or $800 over dealer cost. It includes almost every option you could possibly want.

If you crave a luxury set of wheels... MERCEDES-BENZ C320

To some purists, this Mercedes isn't really a full-fledged luxury car. After all, it's not as big or loaded as top-of-the-line luxe models such as the Mercedes S-class. But this so-called Baby Benz is plush, lush and good-looking, and never gets near the $40K mark--a big plus in an era when most luxe rides cost much more than that. If the Mercedes C320 were a store, it would be Saks Fifth Avenue with a permanent 20%-off sale.

Mercedes has brought a real luxurious feel and look to its smallest sedan. There are amenities galore: Leather seats with five separate power controls to ensure your comfort. Separate driver and passenger climate controls. And the recent redesign of the model has transformed it from boring and boxy to exciting and curvaceous. The C320 is no slouch on the road either. I especially like the spine-tingling acceleration produced by its 3.2-liter, 215-hp V-6. The overall feel is that you're driving a far bigger car--and getting far more than your money's worth. So many people seem to agree with me that it means you'll have to pay full list price--about $36,950--for the C320, close to its chief rival, the bmw 330i. Still, that's $7,000 less than the next level of Mercedes and BMW.

If you're looking for a sexy sports car... HONDA S2000

Even a true sports car like this one can't reverse middle age, but it sure can get the adrenaline pumping. The wizards at Honda have given the S2000 a two-liter, four-cylinder engine with a whopping 240 horsepower. That's close to engine specifications for a racing version of a sports car. And it outpunches its competitors like the Mazda Miata and the BMW Z3 in horsepower. Even the Porsche Boxster, which costs $10,000 more than the S2000, manages only 217 horsepower despite its larger 2.7-liter engine.

With more vroom for the money, the Honda is fantastic fun on the road. Its precise handling and startlingly good brakes add to the sports car pleasure. The six forward gears on the manual shift--you can rev each one up to a tachometer red line of 8,900 rpms--give you maximum control behind the wheel.

On a recent drive in the New York area, I felt as if I owned the road in the S2000. With just a touch of the pedal, I was smoking cars at red lights and racing through curving off-ramps faster than I've ever done in a sedan. And then there was the teenage speed demon who pulled up behind me on Manhattan's West Side Highway in a small Ford Escort. He got to see what speed really looked like. (Be careful. The S2000 is likely to be a ticket magnet.)

This Honda has great looks to go with its power. In fact, I think it is better-looking than the Boxster, though I am sure Porsche loyalists will disagree. Parked among ordinary cars at lunchtime on the snowy main street of a New Jersey suburb, my bright yellow test S2000 with a black convertible top looked like a peacock in the middle of a flock of bedraggled chickens.

Bottom line: Driving the S2000 makes you feel great. Sure, it's noisy at high revs and there isn't much space--I had to take off my heavy ski jacket just to get comfortable in the driver's seat, which resembles a cockpit--but it offers a great driving experience. You'll pay the full sticker price of $32,300 for this much-in-demand car, but you'll never regret it.

If you wouldn't be caught dead driving a minivan... VOLVO V70 STATION WAGON

In the 1980s, America's love affair with station wagons abruptly ended, and Detroit auto companies virtually stopped making station wagons in favor of SUVs and minivans. Well, Volvo never did. In fact, the company just kept making its wagons better and better. Which is where the Volvo V70 comes in.

Like everything from this Swedish automaker, the V70 is commodious, comfortable and reliable too. Last year's redesign brought an end to those refrigerator-square corners, lowered the nose and created more flowing lines. The result: a much better looking wagon.

It's also better inside and under the hood. This year Volvo added about 30 horsepower to the turbocharged, 2.4-liter five-cylinder engine. While no match for a big SUV or minivan, the Volvo gives you more hauling space than most wagons. For instance, its 37.5 cubic feet of cargo space with the seats up tops the BMW 525iA wagon's by five cubic feet. This wagon also has some of the most comfortable seats I have ever ridden in--great if you take long highway trips with the family. Volvo, always among the first to adopt safety innovations like side air bags, has maintained its reputation with this wagon, which has top government and insurance industry crash ratings.

The V70 base model with automatic transmission sells for around $29,800, or about $600 over dealer cost.

If you just love minivans... HONDA ODYSSEY

In a market where most minivans have a frumpy family image and only brand-new models or sports cars sell for full list price, the Odyssey is still wildly popular after two years. That's largely because it's a minivan with sex appeal (not to mention Honda's skillful marketing). It's the best-designed minivan, with innovative features that have generated and sustained buyer buzz. Honda pioneered the fold-flat third seat that quickly converts the area behind the second seat to open cargo space. (Mazda MPV now has similar seats and 2001 GM vans have a variation.)

But the Odyssey isn't just a big hauler. It rides and drives better than other vans in its category. Its 3.5-liter V-6 engine provides faster acceleration than competing vans, and its responsive steering lets it corner almost as well as a sedan--very unusual in such a big vehicle.

Though most minivans ride well, the Odyssey's independent rear suspension, rare among minivans, produces an especially smooth highway ride. And in a segment where safety especially matters, the Odyssey gets five stars in all government crash tests.

The Odyssey usually commands full sticker price--$26,400 for the top EX model--and sometimes even more. Sex appeal really does sell.

If you want to turn heads on campus... VOLKSWAGEN NEW BEETLE

The Volkswagen is pure passion on wheels. It's got zip, look-at-me styling, and it turns heads without even trying. It's no wonder that you see so many of them in campus parking lots these days--and that they're such a resounding hit with the Gen X crowd.

In just over three years the Beetle has become a favorite among students and the singles set. But it offers more than just looks: The Beetle is a terrific small car. It's solid and responsive on the road and can hold its own in traffic. The Beetle's precise handling will let you speed easily through curving back roads if that's your pleasure. It's even got a peppier engine than the rival Honda Civic, a 1.8T turbocharged number that produces 150 horsepower and quick acceleration.

And if your college-bound kid asks for a New Beetle, fear not. It's the only small car to get the top five-star rating based on government and insurance industry crash tests. Important safety features like side air bags are standard equipment. The car also gets good reliability ratings from owners. Like all Volkswagens, it has a 10-year warranty on the power train (engine, transmission and axles).

Though New Beetles are popular, you should be able to buy one for well below the manufacturer's suggested retail price of $20,400 for the GLS version with the l.8T engine, the most popular model. Aim for about $19,600, $500 over dealer's cost.

If you've got a load to carry and need a pickup truck to help you out... FORD F150 SUPERCREW

Last year Ford crossbred two of its biggest sellers: pickups and sport utilities. One result was the stellar F150 SuperCrew, my pick for hauling lots of people and cargo.

The SuperCrew gives you four full-size doors (in contrast to the abbreviated back doors on some competitors), the same seating as the Ford Expedition SUV and a 6 1/2-foot pickup bed. The SuperCrew can accommodate five people comfortably--and a small tree, lumber from Home Depot or other ungainly cargo. If you tend to carry adults instead of kids in the back seat, the roomy seats and ample leg room will especially please your passengers.

The 2001 SuperCrew has had its suspension tweaked and is relatively smooth, at least by pickup standards. For hauling people plus cargo, it's a great solution. Look to buy the SuperCrew at about $25,000 for the mid-level XLT version, $500 over dealer invoice price with options.

REPORTER ASSOCIATES: Rhett Butler, Megan Johnston and Derek Manson