Hyundai’s Efficient Elantra

No other car in its class offers the same price for performance as the sporty and eco-friendly Elantra

Up Front

If you’re looking for a budget-price car for commuting, or for the high school or college grad in the family, the Hyundai Elantra is one of the best choices on the market. It’s inexpensive, sporty, relatively safe, and has a roomy rear seat and trunk. Plus, some versions of the 2007 Elantra have pollution ratings in the same range as hybrid vehicles.

The Elantra’s price is right, especially if you go with a plain version of the car with a stick shift (more later on why it’s worth considering a stick shift for a young owner). Hyundai is offering a $1,000 rebate on the Elantra through July 2, a big discount as a percentage of the car’s low price.

The base price of just $13,995 for the most basic Elantra GLS includes power windows and locks, but air-conditioning and a decent sound system cost extra. A better bet is probably the midrange Elantra SE, which starts at just over $16,000 and comes standard with 16-inch alloy wheels, air-conditioning, a six-speaker CD system with an auxiliary jack, cruise control, and a leather-wrapped steering wheel. The fanciest version of the car, the Limited, which has leather upholstery and heated front seats, starts at $18,495.

Quality is also good. Hyundai’s overall rating dropped precipitously in the latest version of J.D. Power’s annual Initial Quality survey, which came out on June 6. The company fell from third place to No. 12, largely because of glitches that have shown up in the red-hot Santa Fe as the model’s sales have soared.

The Elantra, however, continues to be highly rated, tying with the Toyota (TM) Corolla as the runner-up in the compact-car segment. The Honda (HMC) Civic was top rated (no surprise there), but Honda and Toyota are impressive company for the Hyundai to be in.

The Elantra, now in its fourth generation, was redesigned for the ’07 model year, and is now slightly longer, wider, and taller. In fact, the ’07 Elantra is big enough to qualify as a midsize sedan, according to the government classification system, while the Civic and Corolla are still classified as compacts.

The Elantra’s standard engine is a peppy 2.0-liter, inline four-cylinder that puts out 136 horsepower—unless you buy one in California, Maine, New York, Vermont, or Massachusetts. In those states, the car has a SULEV certification (for Super Ultra Low Emission Vehicle/Partial Zero Emission Vehicle), which means it runs 90% cleaner than the average new model.

In California, the car also has a PZEV certification (for Partial Zero Emission Vehicle), for which few vehicles qualify. Both ratings are government jargon meaning that the car emits virtually no pollution. But the trade-off of the ultra-clean version of the engine is that its horsepower drops to 132.

Not surprisingly, the Elantra is fuel-efficient, too. It’s rated to get 28 miles per gallon in the city and 36 on the highway. In 204 miles of mixed, mainly highway driving, I got 29.8 mpg. That’s impressive, though both the Civic and Corolla have higher mileage ratings. I got 32.9 mpg in the Corolla and 33.1 mpg in the Civic.

Elantra sales haven’t been great, though that’s partly because this is a year of transition from the old to the new model. Sales were up 5% to 9,317 in May, but for the first five months of the year, they fell 7.9%, to 40,315 cars.

The Sonata, Tiburon, and Tucson all had declining sales during the same period. Hyundai’s hottest model so far this year is the Santa Fe SUV, which saw its sales nearly double, to 35,912 through the end of May. The Accent compact is up 28.1%, to 14,859, and the new Entourage minivan is selling reasonably well.

The $1,000 rebate, which started on June 1, makes the Elantra look a lot more attractive vs. the Honda Civic and Mazda 3, neither of which is being pumped up with rebates. However, the Elantra still faces stiff competition. Through July 2, Ford (F) is offering a $2,500 rebate on the Focus (plus another $500 for recent college grads), and Toyota is offering $750 off on the aging Corolla. And through July 9, General Motors (GM) is offering $1,000 to $1,500 off on the Chevy Cobalt.

Behind the Wheel

The Elantra is a fun little car to drive. The steering is tight, and the car handles better than most econo-boxes on curvy roads and during hard cornering. It isn’t really fast: My best times in accelerating from zero to 60 were around 8.6 seconds. But that’s quick for an economy car, and the Elantra’s small size makes it feel quicker than it actually is.

Obviously, this is no Porsche. The stick shift is sloppy. You sometimes have to search to get it into gear, and at one point I didn’t get it entirely into reverse and it popped out of gear when I started backing up.

The car doesn’t feel as solid as a Civic or a Corolla on bumpy roads. Once when the right front tire plunged into a deep pothole, there was a sickening thud that felt like it would damage the steering mechanism if it happened often. I never had that feeling driving over the same backroads in the Civic or Corolla.

The Elantra is smooth and quiet on the highway. I, of course, would never exceed the speed limit deliberately. But, absolutely inadvertently, I was cruising along a four-lane highway not far from my house one evening, and one of my favorite DJs on my local community radio station was spinning Van Morrison’s version of Gloria and I got into it—and found myself bopping along at 95 mph. I kept cruising along at that speed for two or three minutes, and the car didn’t seem to strain at all. The cabin was far from silent, but highway noise wasn’t loud enough to interfere with my radio-listening. And the ride remained relatively smooth.

The Elantra’s interior is solidly made and well designed, with lots of attractive molded storage spaces, cup holders, and elements to make it look distinctive while also being practical. The driver’s seat is comfortable, and the rear seats are surprisingly roomy. With the driver’s seat set for my height (5 feet 10 inches), I had more than ample knee space in the driver’s-side rear seat. Headroom is good, too, and there’s plenty of space to slide your feet under the front seats.

The rear seats fold down in a 60/40 pattern to create a hauling space with a sizable pass-through to the trunk. As in the Chevy Cobalt and a few other cars, the seatback release is in the trunk, where it’s less likely to be released by accident by children during a long drive. There are nets on the backs of the front seats for holding magazines, but no map and magazine holders built into the sides of the rear doors.

Buy It Or Bag It?

There are better cars in the class than the Elantra. The Honda Civic comes to mind, but the Civic costs a lot more. If money is tight, the Elantra offers excellent value, especially if you buy before July 2 and your Hyundai dealer gives you a deal. Also, keep in mind that Hyundai offers one of the best warranties of any carmaker.

The Elantra’s average recent selling price is $15,406, according to the Power Information Network, after an average cash rebate of $1,169. That’s about the same as the Toyota Corolla ($15,706), but the Corolla is bland and is being redesigned for the ’08 model year.

The hot-selling Honda Civic is the best car in the segment, in my opinion, but isn’t being discounted by most dealers and costs an average of $18,806, $3,400 more than the Hyundai. The Mazda 3, another sporty, well-built Japanese model, costs an average of $18,878 and carries an average discount of only $664, according to the Power Information Network (PIN, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP)).

Competing domestic models are cheaper largely because they carry bigger average discounts. For instance, the Ford Focus is going for an average of just $14,538 after an average discount of $2,370, while the Chevy Cobalt sells for an average of $13,992 after a $1,733 discount, according to PIN. However, the Focus is an aging model that Ford has allowed to languish, and the Cobalt, while redesigned for the ’05 model year and solidly built, isn’t as much fun to drive as the Elantra.

The domestic compact I like best is DaimlerChrysler’s (DCX) new Caliber, which costs about two grand more than the Elantra. The Caliber sells for an average of $17,445 with an average discount of just $509. It isn’t great fun to drive, but it’s new, has a practical station-wagon-style design, and is available with all-wheel drive.

If you’re buying an Elantra for a student, consider saving money by going with the stick shift. True, as some readers have pointed out, manual transmissions are disappearing from the U.S. But not overseas, where they remain popular, and in some places dominant. I’ve seen American tourists at rental car desks angrily demanding a car with an automatic transmission when none was available. Being able to use a stick shift is an important part of a student’s international education, like learning a foreign language. Also, of course, any economy car is more fun to drive with a stick shift.

Editor’s Rating: 4/5

The Good: Low price, fuel-efficient, fun to drive, great warranty

The Bad: Doesn’t feel as solidly made as a Honda Civic or Toyota Corolla

The Bottom Line: Dollar for dollar, one of the best compacts on the market

by Thane Peterson BusinessWeek