The Smart Fortwo is an all-new entry in the U.S. car market. At less than nine feet long, it is the smallest car sold in the United States. As its name suggests, it is a two-seater. It comes in coupe and convertible versions, both two-door models. It's powered by a tiny 1.0-liter three-cylinder engine, and the transmission is a five-speed automated manual. The Smart Fortwo is rear-wheel drive. Meant for use in the city, it's capable of speeds of up to 90 mph.

The first-generation Smart Fortwo has been available in Europe since 1998. Now in its second generation, the Fortwo is finally available in the United States as a 2008 model. The car is produced by the Mercedes Car Group and sold through stand-alone Smart dealerships and Mercedes-Benz dealers in the U.S. It is imported by Smart USA Distributor LLC, which is a division of Roger Penske's Penske Automotive Group. Smart USA markets its name in fashionable lower case: smart fortwo.

The Fortwo is best used as a city car. It's meant to get drivers from A to B without frills. Its small size makes it easy to park and allows it to easily dart in and out of traffic. With fuel mileage of 33 mpg in the city and 40 mpg on the highway, the Smart car will appeal to commuters who make short trips by themselves. Its fuel economy numbers aren't as good as the Toyota Prius or Honda Civic Hybrid, but they're better than any other economy car.

At the same time, it has its compromises. Its small engine wants for power, the transmission shifts awkwardly, the ride is busy, and it lacks a rear seat and cargo carrying capacity.

On the inside, the Fortwo has a spartan cabin dominated by economy-grade plastics. It is surprisingly roomy, with enough head clearance and leg room for very tall passengers. Shoulder room, however, will be tight for two large occupants. Cubby storage is minimal.

The rear of the Smart Fortwo cabin is an open hatch area. There isn't as much room as in most trunks and certainly not as much as what you'll find in a compact hatchback, but it has enough space for a trip to the grocery store.

Officials from Smart say the Fortwo will have the lowest cost of ownership of any car in the U.S. That's yet to be proven, but it should certainly be one of the least expensive cars to own and operate.

Although pricing for the base Pure model starts at $11,590, most customers will opt for the $13,590 Passion model that has a radio and air conditioning. We're certainly passionate about those two features. But the Passion puts the Fortwo in the price league of larger, roomier subcompacts that can carry more passengers.

The Fortwo isn't the best car for drivers who need an all-around vehicle, but it is a good choice for city dwellers or as a second vehicle to run errands.