Toyota completely redesigned and re-engineered the RAV4 for model-year 2001, producing a more refined and better-looking vehicle than the previous-generation model.

For 2003, RAV4 adds an optional Sport Package with unique trim inside and out, plus popular comfort and convenience features such as air conditioning, power windows and mirrors, six-speaker stereo, and carpeted floor and cargo mats.

Without the Sport Package, a 2003 RAV4 looks pretty much like a 2002 RAV4, which hadn't changed from the all-new 2001 model. Compared to pre-2001 models, the current RAV4 is larger in length, width, height, wheelbase, and track. The track was widened by nearly two inches but the height increased by just half an inch. The current RAV4 hugs the earth closer than the earlier generation as well, with about one inch less ground clearance. That sounds more stable to us.

At just 166.2 inches long, the RAV4 is still 9 inches shorter than a Subaru Forester and 12.4 inches shorter than a Honda CR-V. (Opt for the hard spare tire cover, and the RAV4 grows an inch.)

The styling suggests a vector or wedge shape, which is pretty hard to do with what is basically a tall, small box. This is mostly accomplished by a sloping hood and downward cant from the rear quarter panels forward, under the side windows. When the arched roofline ends with the optional spoiler, the result is cool looking.

The cladding and body molding are smooth, the fender flares around 16-inch wheels are beefy for a mini SUV, and sculpted scoops in the sides and hood try to be eye-catching. Combination tail lights wrap nicely around the sides. At the nose, the headlights are shaped like wasp eyes, angling upward. Optional fog lights are built into the air dam, which contains a gaping grille with a few teeth. The gray body cladding looks good with some colors, but contrasts poorly with others.

The optional alloy wheels are a simple five-spoke star pattern, and the optional cover over the spare, hanging on the rear gate, serves its purpose in making the RAV4 look less rough, but therefore less rugged. The rear hatch is hinged on the right side. That means the door swings open toward the curb, inconvenient at airports because you have to walk around the door.

Legroom is ample, and the driver's footrest allows even more stretch. The front bucket seats fit nicely, and the gray leather with dimpled black trim in our test vehicle was classy. The seats are narrow at the hips, but we didn't feel squeezed. The seating position feels confidently high and offers excellent visibility forward, although the spare tire intrudes into the view out the rear. The tidy three-spoke leather-wrapped energy-absorbing urethane steering wheel tilted perfectly into place for drivers 4'-10" and 5'-10".

Instruments are easy to read and the instrument panel is handsome, trimmed as ours was in titanium. By day, the gauges are a sort of metallic off-white, and by night they glow sort of orange. Admittedly, these aren't quite as legible as boring old white-on-black gauges. Directly ahead are three circles: speedo on left, temp/fuel/warning lights and gear indicator on the right, and nicely balanced between and above them in a smaller circle is the neat-looking tach.

Climate controls are mercifully simple. You got on, you got off, you got fan speed, you got blue for cold, red for hot; what else do you need? There's a stubby stalk for the cruise control on the steering wheel, under the wiper stalk on the left side of the steering column. There are two big cup holders forward of the natty leather-wrapped E-brake lever between the seats, an accessory power outlet, and a small space near the console that's intended for change but big enough for cell phones. In the rear as in the front are two cup holders and one power outlet.

Storage compartments are provided on both sides of the cargo bay as well as under its floor. There's a net pocket on the rear door, pockets in all four doors, and a sunglasses holder under the steering wheel. Visors are fitted with extensions and illuminated vanity mirrors.

With the 50/50 split bench rear seats removed, there's 68.3 cubic feet of cargo volume available. The low load floor means it's easy to load groceries or gear without excessive effort or back strain. We found the cargo cover constantly in the way. But it features a nice two-piece pullout design that makes it easy to remove.

RAV4 feels responsive and pleasant around town. The engine makes 148 horsepower and 142 foot-pounds of torque. It revs relatively high, but offers good torque at low rpm. Acceleration in the 4WD model with automatic transmission is lively and feels almost effortless, as if this 2976-pound vehicle were a featherweight. It could use more power at higher elevations, however, as we found while driving one near Yellowstone National Park.

The water-cooled, electronically controlled, four-speed automatic transmission fully complements the smoothness of the engine. Every shift felt seamless.

Around-town handling and parking lot maneuvering is wonderfully nimble. The RAV feels even lighter than its 2976 pounds. On the highway, the power rack-and-pinion steering is precise, with no dodginess. In gusty winds, however, the it wanders quite a bit.

The chassis and suspension take bumps with equanimity, and offer a ride as good or better than many larger SUVs. Maybe even more impressively, there's no detectable pitching or tipping, which is no mean feat for any SUV. There's little that's truck-like about the suspension. The independent front end uses MacPherson struts with L-shaped lower control arms, while the rear suspension is a double wishbone layout with coil springs and nitrogen-filled shock absorbers.

The brakes are plenty big enough for the RAV4's weight, with 10.7-inch front ventilated discs and 9.0-inch rear drums. With a vehicle this good, it would be a shame not to include the optional anti-lock brakes, a good value ($300), especially since the ABS comes with EBD. Electronic brake force distribution adjusts the braking force on the rear wheels according to how the vehicle is loaded, and also modulates the rear brakes as the vehicle's weight shifts forward while stopping. EBD can help reduce stopping distances and improve stability, while ABS helps the driver maintain control in an emergency stopping situation.

All RAV4s have four doors. There is only one engine, which was new for 2001: an all-aluminum, 16-valve, dohc inline four-cylinder with variable valve timing, displacing 2.0 liters and producing 148 horsepower. A five-speed manual is standard. A four-speed electronically controlled automatic transmission is available for the 2WD ($17,575); and 4WD ($18,975) models.

RAV4 sounds cheap, but options can add up. Air conditioning is not standard ($900). Other options: antilock brakes ($300); roof rack ($220); alloy wheels with slightly wider tires ($895); remote keyless entry ($230); leather ($840); limited-slip differential ($390) rear spoiler ($200); power moonroof ($900). The L package ($2,153) includes air conditioning, cruise control, a premium CD sound system, tinted windows, fog lamps, color-keyed body trim, and a hard spare tire cover. Quick Order Package ($1,433) adds air conditioning, a CD audio system, cruise control, power windows, locks and mirrors and carpeted floor mats.

The new Sport Package ($2,067) features a unique grille, aerodynamic headlamps, a hood scoop, and gray-painted overfenders.