Assembled In: Toledo, Ohio.

Model Line Up: Jeep Liberty Sport ($20,330), Sport 4WD ($21,940), Limited ($24,515), Limited 4WD ($26,125).

Model Tested: Jeep Liberty Limited 4x4.

Options Tested: Premium Group 2 ($2295) with automatic headlights, heated front seats, leather upholstery, six-way power driver's seat with memory, two-way power passenger seat, remote starting, automatic climate control, interior air filter, rear obstacle detection, and P235/60R18 all-season tires on chromed aluminum wheels; Class III towing package with trailer sway control ($495); skid plates ($225); MyGIG Multi-Media Infotainment System ($1550) with navigation system, 20-gigabyte hard drive, and Sirius satellite radio with real-time traffic and one-year subscription; Selec-Trac II full-time four-wheel drive ($445); Sky Slider sunroof ($1200).

The Jeep Liberty is all-new for 2008. It's slightly bigger and has a smoother ride, but it maintains the ruggedness of the previous version. The 2008 Liberty is quite capable off road, one of the best in its class.

The 2008 Jeep Liberty is 2.5 inches longer overall and its wheelbase is two inches longer than that of its predecessor. With heavily revised styling, the 2008 Liberty is taller and more angular than the 2001-2007 models, reminiscent of the much-loved, rugged but crude 1990s Jeep Cherokee. Compared to recent Jeep offerings such as the Patriot and Compass, the all-new 2008 Liberty is more of a true Jeep, with off-road prowess and bold, upright styling.

The only engine for 2008 is a carryover 3.7-liter V6 that makes 210 horsepower. A six-speed manual transmission is standard and a four-speed automatic is optional. In these days of six-speed automatics, the four-speed is somewhat antiquated, and we don't think it gets the most out of the 3.7-liter V6, an engine that could use a little help. When it comes to fuel economy, the Liberty's weight and powertrain provide numbers that are on the lower end of the class.

Jeep has made an effort to refine the Liberty and add premium options. Snow Belt drivers will appreciate the new full-time all-wheel drive system available in addition to the carryover part-time system. Both four-wheel-drive systems make the Liberty highly capable off road, and they are aided by the addition of Hill Start Assist and Hill Descent Control. Within its class, only the Nissan Xterra can claim as much off-road capability.

When they redesigned it, Jeep engineers set out to give the 2008 Liberty pleasant road manners and, when it comes to ride quality, they succeeded. The Liberty rides firmly, but irons out most bumps quite well and is stable on the highway. The Liberty sacrifices handling for off-road prowess, however. The Liberty leans in turns and has a floppy feeling in quick changes of direction. It's this aspect that makes the Liberty most comparable to the Nissan Xterra and Ford Escape. These three are more rugged, more capable off road than the Honda CR-V, Toyota RAV4, and the new Nissan Rogue, which are lighter, more agile, and more carlike. If we were heading up a rough logging road, we'd be pleased to be in a Liberty.

Inside, the Liberty has plenty of room for five. We view it as a step back in terms of materials quality and fit and finish, however. The previous Liberty had more soft touch surfaces and closer panel gaps, while the current model has more hard-plastic surfaces. Still, it's not an unpleasant cockpit.

Cargo room is a plus. The Liberty's second row seats fold flat, as does the front passenger seat, to provide plenty of room for hauling boxes, bikes and life's other accessories.

With a maximum towing capacity of 5000 pounds, rugged off-road capability and plenty of cargo space, the 2008 Jeep Liberty is a good choice for small families or couples that tow boats or go camping. If your travels don't often take you off-road, the other small SUVs will deliver better fuel economy and better handling, but none will offer a more pleasant ride.

The 2008 Jeep Liberty is offered in two trim levels, both with rear- or four-wheel drive. The models are Sport ($20,330), Sport 4WD ($21,940), Limited ($24,515), and Limited 4WD ($26,125). The lone engine is a 210-horsepower 3.7-liter V6. Sport models come standard with a six-speed manual transmission; a four-speed automatic ($825) is optional for Sport and standard on Limited.

The base four-wheel-drive system is Jeep's Command Trac, a part-time system designed for off-road use. Also offered is Selec-Trac II ($445), a full-time system that allows use of four-wheel drive on dry pavement. Both systems have low-range gearing.

Sport features include cloth upholstery, air conditioning, tilt steering wheel, 60/40 split folding rear seats, power mirrors, power locks, power windows, remote keyless entry, AM/FM/CD stereo with four speakers and auxiliary input jack, and P225/75R16 all-season tires on aluminum wheels.

Sport options include a Sky Slider canvas sunroof ($1200); a regular sunroof ($850); Class III towing package with trailer sway control ($495); the Premium Sound Group with 6-disc CD changer, six speakers and Sirius satellite radio with one-year subscription ($345); all-terrain tires ($280); skid plates ($225) for the 4x4 model; and the Popular Equipment Group ($995) with 115-volt auxiliary power outlet, six speakers, cargo compartment cover, fog lamps, front passenger fold-flat seat, roof rails, cruise control, external temperature display and compass.

Limited models add Yes Essentials cloth upholstery, heated power mirrors, 368-watt Infinity sound system with eight speakers, cruise control, vehicle information center, leather-wrapped steering wheel with redundant audio and vehicle information center controls, auto-dimming rearview mirror, roof rails, six-way power driver's seat, fold-flat front passenger seat, universal garage door opener, antitheft alarm, fog lamps, full-size spare and P236/65R17 all-season tires on aluminum wheels.

Limited options include the Premium Group ($995) with automatic headlights, heated front seats, leather upholstery, six-way power driver's seat with memory, two-way power passenger seat and remote starting; the Premium Group 2 ($2295) which adds automatic climate control, interior air filter, rear obstacle detection and P235/60R18 all-season tires on chromed aluminum wheels to the Premium Group; and MyGIG Multimedia Infotainment system ($1550) with 20-gigabyte hard drive, navigation system, Sirius satellite radio with real-time traffic and one-year subscription. The Limited's Premium Sound Group ($395) adds Jeep's UConnect wireless cell phone link to the Sport's version.

Safety features include the mandated dual front airbags, plus head-protecting side-curtain airbags with rollover sensors and front side airbags for torso protection. Active safety features include anti-lock brakes with brake assist, hill start assist, traction control, and electronic stability control with rollover mitigation. The antilock brakes have rough road detection; when rough conditions are detected, the system holds the brake pulses longer to better slow the vehicle. Hill descent control is standard on 4x4 models. Optional safety features include trailer sway control and rear obstacle detection.

When Jeep introduced the Liberty in 2001, it was the middle child of a three vehicle lineup. Now that it's redesigned for 2008, it's the middle child of a seven-vehicle lineup. Compared to recent Jeep offerings such as the Patriot and Compass, however, it is more of a true Jeep, with off-road prowess and bold, upright styling.

The 2008 Liberty is unmistakable as a Jeep. The 2008 model is 2.5 inches longer and 0.8 inch wider than the previous generation (2001-07), with a wheelbase that grows by 1.8 inches. Its tall, upright, angular styling fits with the current Jeep design idiom while also recalling the 1990s Cherokee. Whereas the last model had some soft lines and skewed 60/40 toward women buyers, Jeep feels the new model's more rugged looks will attract an even split of male/female buyers.

Internally, Jeep calls the Liberty's platform KJ. It is the same platform used for the last model and it is shared with the Dodge Nitro. The big news here is the new rear suspension. It's an independent five-link unit that allows for greater interior room and better ride characteristics.

The most noticeable aspect of the front end is Jeep's characteristic seven-slot grille, which is taller on this model. The grille is body color on Sport, chrome on Limited. The front fascia is body color on all, and the front air dam is removable to provide more ground clearance for off-roading.

From the side, the Liberty looks like a junior Commander, with tall windows in a squared off greenhouse. The Limited's chrome theme extends to the side with chrome side trim and roof rails. These components are black on Sport, and the roof rails are optional. In an attempt to give the Liberty the open feel of a Wrangler, Jeep offers the Sky Slider sunroof. Jeep says this canvas power sunroof is four times the size of an average sunroof.

A notable feature of the rear is the lack of an exterior spare tire. Jeep has moved it under the floor for 2008. The tailgate also changes from a swing gate to a liftgate design, and separate opening rear glass is newly standard.

Jeep says its competition is the Honda CRV, Ford Escape, Toyota RAV4 and Nissan Xterra. The 2008 Liberty is approximately the same size as these vehicles, but is considerably heavier than all but the Xterra. It is also more capable off-road than all but the Xterra.

The 2008 Jeep Liberty has better off-road capability and more towing capacity than most of its competitors. It offers generous cargo space and a high seating position. All-new for 2008, the latest version is more refined than the previous generation. But it's heavy for a compact SUV, and it lacks the handling and fuel economy of most of its rivals. If off-road capability is important, Liberty is a good choice; otherwise several rivals will handle better and go easier on gas.

NewCarTestDrive.com correspondent Kirk Bell filed this report on the 2008 Jeep Liberty from Indianapolis.