(MONEY Magazine) – USED TO BE, BUYING A SMALL CAR MEANT getting the runt of a good automaker's litter or dealing with a manufacturer that had little regard for quality, reliability or even solvency. Either way, you were likely to drive off the lot in a rickety ride that would only hold itself together until, naturally, the warranty ran out.

So it's refreshing to see the latest crop of "microcars" showing up at dealers. For starters, they come from good families: Honda, Nissan and Toyota, manufacturers that know a thing or two about quality and reliability (and that are tired of seeing younger buyers flock to inexpensive models from upstart Korean manufacturers such as Kia and Daewoo). Added bonuses include interiors that don't look as if they were designed by a prison warden, great mileage and the ability to swallow a ridiculous amount of cargo.

Plus, with an average sticker price of $13,000 (this when a loaded Honda Civic can run you $27,000--and that's not even the Hybrid), they're priced right.

Here's the other thing about small cars now: They're cool. In an age of high fuel prices, owning one--whether it's your second vehicle or it's for your kid--doesn't carry the same stigma it once did. Owners of Yugos and Le Cars used to have to park blocks away from where they were actually going, lest someone see them behind the wheel. But in the wake of the wildly successful Mini Cooper, pulling up in a Toyota Yaris, a Nissan Versa or a Honda Fit is the perfect way to show you're smart, hip and eco-frugal. At least that's how I felt while driving all three in and around New York this spring. Read on to see how they stack up against one another--and against their bigger, pricier brothers.

3rd place

Toyota Yaris $11,850 (hatch) $12,405 (sedan) 106 hp, 34/39 mpg (automatic)

THE LEAST EXPENSIVE CAR IN THIS TEST, the Yaris, is unashamedly thrifty. Maybe too thrifty: Windup windows are standard, and the interior, while roomy (an adult can comfortably sit in a back seat that even reclines a few inches), won't be confused with a Camry's. Cabin surfaces range from harsh gray plastic to harsher, darker gray plastic. Creature comforts, save the CD player and the AC, are nonexistent. In the other cars tested, low sticker prices seem to come via clever solutions and creative packaging. With the Yaris, you feel that Toyota just left a lot of stuff out of the car.

Driving the Yaris is a mixed bag. It's tiny enough to slide between and around other cars, and its light, sensitive steering makes the task easy. If one of those maneuvers doesn't go as planned, optional anti-lock brakes and a full complement of air bags will step in. (It also earned a five-star crash-test rating.) Getting up to cruising speed, though, can be a bit of a nail-biter. You wind up flooring the Yaris' accelerator to merge onto the highway, and at around 70 mph the car starts to feel as if it's at its limit.

If you were to pay base price for the Yaris, you might be getting a good deal. But once you opt for an automatic transmission and power windows and locks, the Yaris gets close in cost to its competitors, which do a better job of making you feel you got more for less.

BROTHER AGAINST BROTHER • A well-equipped Yaris is within a few hundred dollars of Toyota's own $15,000 Corolla, a bigger car with a stronger engine, a better interior, a proven track record and a none-too-shabby city/highway rating of 30/38 mpg. It's hard not to prefer the Corolla.

2nd place Nissan Versa $13,000 (estimated) 122 hp, 30/36 mpg

WHETHER TO PUT THE VERSA IN first or second place was a tough call. It's well appointed, surprisingly roomy and fun to drive. If Honda hadn't changed the game with the Fit's radical interior layout, it would be hard to say which was the better car. The Versa is a conventional-looking hatchback, and at a foot and a half longer than the Yaris, it's decidedly bigger. That length is put to good use inside. The front and back seats are generous in size, and the tall roofline (a feature shared by all the competitors) gives the cabin a spacious feel. The cargo area grows by a few cubic feet when the rear seats are folded down, but as they don't fold completely flat, they're not ideal.

What really sets the Versa apart is how well equipped it is. The steering wheel has controls for the stereo, and a Bluetooth wireless connection lets you talk on your cell phone hands-free. Added treats include an in-dash six-CD changer and a keyless entry system. The driver's-side window opens and closes at the push of a button--there are luxury cars that still don't offer this feature.

Since in this class you're not looking for extraordinary power or handling, it's a compliment that the Nissan feels positively average on the road. The Versa's optional continuously variable transmission doesn't have gears, so you'll need to get used to accelerating without feeling the "steps" of a five- or six-speed. But the system works well and helps keep the car's mpg figures above 30.

The Versa has all the good qualities of a larger automobile, just shrunk into a smaller body. It's worth a serious look.

BROTHER AGAINST BROTHER • Nissan is rolling out a bigger, more luxurious Sentra this fall. And a more expensive one too, with prices starting near $18,000. The Versa tops out at about $17,000. Unless you're dying for the "entry luxury" touches (tan leather and light wood accents) that will be in the new Sentra, you're better off sticking with the Versa.

1st place Honda Fit $14,400 109 hp, 31/38 mpg

WHILE DIFFERENT FROM EACH OTHER, the Yaris and the Versa are variations on the same hatchback theme. Honda's Fit is quite a departure. A taller wedge shape gives it proportions that are almost minivan-like, and ingenious folding seats make it even more practical. The rear seats fold flat into the floor, just as on a Chrysler Town & Country, opening up a tremendous amount of room. You don't even have to remove the headrests--they just slide under the front row. The rear seat bottoms also flip up, creating room for taller objects such as a potted ficus or Emmanuel Lewis, and the front passenger seat can recline 180 degrees. Do that when the rear seats are stowed, and Yao Ming can stretch out.

Driving the Fit is equally eye-opening. The 109-hp engine isn't the most powerful, but the five-speed automatic (most cars in this class have four-speed transmissions) makes quick, decisive shifts; the throttle responds instantly to the gas pedal; and the suspension keeps the car firmly planted through corners.

From behind the wheel, you notice how well put together the Fit's cabin is. The dash feels solid and doesn't look as if it has been slapped together with spare parts. The gauges have cool blue backlighting, and the steering wheel is fitted with gearshift paddles akin to those in Honda's Formula One race cars.

The Fit has the highest base price among the three models here, but it comes with certain standard features that are optional on the others--including side and side-curtain air bags and anti-lock brakes. When you start to make apples-to-apples comparisons, the Fit's price premium is considerably smaller. When you factor in its excellent drivetrain and terrific utility, that small premium seems like a bargain.

BROTHER AGAINST BROTHER • A loaded Fit puts you into Civic territory, but who cares? The Civic's great, but it doesn't have the kind of cargo-hauling ability the Fit was designed for, and it's nowhere near as easy to park. The Fit is just right.

Spend

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A Mini History of Microcars

Sure, a Ford Thunderbird was once a "small car," but that was only compared with the rest of the Nimitz-class cruisers on the road. The first truly small cars came from Europe, where resources were scarce after W.W. II and people needed basic transportation. Here are some of the bigger hits of the category:

1945 VW Beetle

$800 24 HP

The Bug's original name: Strength-Through-Joy Car. And no, it doesn't sound better in German.

1959 Austin Mini

$1,400 34 HP

Oh, Britannia: Original Minis had storage pockets that were designed to fit a bottle of Gordon's gin.

1973 Honda Civic

$2,200 50 HP

Thanks to the '73 OPEC embargo, the frugal Civic went from zero to hero in the U.S. in a matter of months.

1974 VW Golf

$3,000 70 HP

Here the Golf was called the Rabbit. Until they started calling it the Golf. Today it's a Rabbit again. Never mind.

1976 Renault Le Car

$2,950 55 HP

They say the glitchy Le Car was designed in two days. Owners will tell you that's not hard to believe.

1985 Yugo GV

$3,990 67 HP

Old car joke: What do you call a Yugo with brakes?

Answer: Customized.

2001 Mini Cooper

$16,500 115 HP

A new version is a year out. Expect an upgraded interior and new engines but the same look. If it ain't broke...