As regular readers have already discovered, I am a big fan of compact sport wagons. They are small, agile and utilitarian; they are big enough to haul moderate loads, small enough to be reasonably fuel efficient and easy to handle.

BMW's rear-wheel-drive 325i wagon joins the Audi A4, Volkswagen Passat, Mercedes-Benz C320 and Mazda Protege 5. Powered by a 184-horsepower, 2.5-liter six-cylinder engine, the 3-series wagon marries BMW's traditional fun-to-drive personality with the utility of a small station wagon. Having the capacity to carry baby gear, lawn supplies or outdoor equipment doesn't mean you have to drive a boring vehicle. The 325i wagon looks sharp and athletic, more interesting to some eyes than the four-door sedan. The base price is $30,045 and $31,895 for the all-wheel-drive model.

Small wagons are tremendously popular in Europe, where most families have to rely on just one vehicle to serve a variety of needs. Although these little haulers havenÕt typically been all that popular in this country, there seems to be a rising tide of interest in cars that are capable of providing fun and function in a compact package.

BMW's 2.5-liter, DOHC in-line engine is a model of sweetness. Minimal vibration is inherent in the six-cylinder design, and technical advancements such as variable valve timing allow its power to be spread over a wide rpm range. That enhances drivability as well as performance. The 325's engine has a free-revving spirit that is perfectly served by the five-speed manual gearbox and its ball-bearing smooth shift linkage. Running to the hardware store for a couple more bags of mulch can be as satisfying as powering through an interstate cloverleaf on the way to work.

Modest visual changes have been applied to the 3-series for 2002. The headlight clusters have been reshaped with deeper cutouts and new lights. The dual kidney grille is wider, hood lines have a sharper sweep and front-wheel cutouts are larger. Subtle changes, to be sure, but ones that add more interest.

The 325xi wagon offers the security of all-wheel drive plus a special version of BMW's dynamic stability control program that also features BMW's Hill Descent Control from the X5 sport-utility vehicle. Hill Descent Control helps the driver maintain control at a walking pace on steep downhill roads by pressing a console button. This would be especially helpful for those who drive in the mountains or on unimproved country roads.

A fully independent suspension and generous disc brakes are key to the handling prowess of the 325i wagon. It sticks to the roads with impressive grip. Body lean and sway are minimized, and the powerful disc brakes erase speed with confidence and great feel.

The 325's interior remains as it has been: functional, attractive and comfortable. Deeply contoured seats and easy-to-read gauges are its highlights. The steering wheel has fingertip controls for audio and cruise control, although their markings are somewhat cryptic. The AM/FM/CD stereo and automatic climate control system are easy to understand and use. Power window switches located on the center console are not as intuitive as switches mounted on the door panels.

Front and side airbags are standard in front, as are the tubular head protection side airbags that inflate across the windows. Side airbags for the rear seats are optional.

A crucial element in sport wagons is the ease with which the rear seat can be folded down, and the 325 excels in this area. No seat bottom to tip forward, no headrests to remove; just tug the release switch and pull down. Like a hatchback, the rear tailgate pivots open to yield a wide opening.

If you're looking for driving fun and everyday utility in one package, check out a sport wagon like the 325 from BMW. You'll be surprised at how practical and enjoyable it can be.

The base price of the test car was $30,045. Options included metallic paint, leather u holstery, heated seats, moon roof, wood trim, power seats, Xenon headlights, park distance control and the upgraded Harman-Kardon stereo. The sticker price was $37,195.

Four years or 50,000 miles.

Point: The 325i sport wagon is a good compromise for those who value driving fun and hauling versatility. It handles like a sports sedan, hauls like a station wagon and gets decent fuel economy. All-wheel drive is an option for those who want all-weather traction.

Counterpoint: The current 3-series is beginning to look dated despite minor styling tweaks, a well-optioned model is fairly expensive and power window switches are located on the center console rather than the door panels.

Engine: 2.5-liter, 184-hp 6-cyl.
Transmission: Five-speed Rear-wheel drive
Wheelbase: 107.3 inches
Curb weight: 3,362 lbs.
Base price: $30,045
As driven: $37,195
Mpg rating: 20 city, 29 hwy.
> >