When a car exceeds your expectations, you have to examine not only the vehicle, but your expectations. The 2007 Volkswagen Passat Wagon 3.6 4Motion so exceeded my expectations that I realized that I'm stuck in the past, and the Passat is headed into the future. I'm going to try to look at the Passat with fresh eyes and an open mind. Pricing: $33,100 base, $38,280 as tested, EPA mileage 18 MPG (7.65 km/l) city/26 MPG (11.05 km/l) highway.

First Glance: Sleek, handsome and elegant -- a total surprise

Where did I get these expectations for the Passat? I've probably spent more time behind the wheels of Volkswagens than any other cars over the course of my life. I even spent some time as a VW salesman while I took a break from the rigors of a college education. I've always admired the company -- in my view, VW was sincere about bringing a solid, no-frills car to the people. The 2007 Passat Wagon is certainly solid, but it is anything but no-frills. In fact, VW is pushing the Passat to the near-luxury class.

From its slightly bulbous nose to its gently rounded back, the Passat Wagon is an elegant beast. If a wagon can be sleek, the Passat is sleek. Up front is the VW corporate nose, replete with a big VW logo in a smiling mouth with chrome lips. In conjunction with a rising beltline, the roofline slopes toward the back of the wagon creating an almost chopped look that gives a sense of forward motion. The rear gate is narrower at the bottom than the top, its top half formed by wrap-around glass. The 17" alloy wheels fit the wheel wells perfectly.

Overall, the Passat Wagon is very elegant, with superb paint, fit and finish. It's a gorgeous car, with visual interest from every angle. Not what I expected at all.

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In the Driver's Seat: All-out luxury

If the exterior of the Passat Wagon confounded my expectations, I was totally unprepared for the interior. My test vehicle was outfitted with a $2,750 Luxury Package, which included leather driver and passenger seats with 12-way power and electric heat, wood trim, heated windshield washer fluid and rain-sensing wipers, among other features. The seats are great, supportive and easily adjustable, and the leather surfaces are supple.

Sitting in the driver's seat, the Passat's cabin wraps around you with a great ergonomic layout that just plain works. Everything's right where you expect it to be. A great instrument cluster sits above the steering wheel under a slight eyebrow in the dash. Big rotary analog gauges display the important information and smaller LCD readouts toggle less pressing info. The center stack houses the audio, navigation and climate controls. VW's excellent DVD-based navigation system will set you back $1,800 and its easily worth the price.

Rear seat accommodations are good for two adults, too tight for three full-sized humans. Like the exterior, fit and finish are superb throughout the interior of the Passat. Material selection and quality rivals the luxury brands' in every respect. The Passat is no econobox.

On the Road: Excellent handling enhanced by 4Motion

The Passat has always been a pleasant car to drive with adequate handling and maneuverability. The 4Motion package ups the ante, delivering full-time power to all four wheels through a special computer-controlled coupling. Independent suspension controls the body roll without making the ride too harsh, and incredibly direct electro-mechanical power steering makes the Passat a blast in the curves. The 3.6 liter V6 under the hood provides great motivation with 280 hp and 265 lb-ft of torque pulsing through the 6-speed automatic transmission. If you're into shifting for yourself, a tiptronic mode is available -- just punch the Passat through the gears with the console-mounted gear selector. Or let the transmission do the work, like I did -- choose "S" for "Sport" driving mode and the shift points come later in the power band. 4-wheel ventilated power ABS disc brakes haul you down from speed and traction control keeps everything on the road.

It's too bad that wagons fell out of fashion for so long. I sure don't need the gas bill an SUV can run up. The Passat Wagon is rated for 18 mpg city/26 mpg highway, very respectable numbers for the performance. And my dog loved the space behind the rear seats, always an important consideration.

Journey's End: Welcome to the near-luxury class

Volkswagen has been struggling with an identity crisis for a while now -- are they a value brand? A utilitarian workhorse? A luxury marque? With the Passat, VW stakes a claim on near-luxury, undercutting the other German brands by thousands of dollars, yet offering great features and performance for the money.

There are several other competitors out there that you should consider if you need a mid-sized wagon. If you must have German engineering, the Audi A6, the Mercedes E-Class and BMW 5-series wagons are all excellent vehicles, albeit $5,000 to $13,000 pricier than the Passat. Japan's Subaru Legacy Wagon is a great alternative, with all-wheel drive and spirited performance. The Mazda6 Wagon is a little less luxurious, a little less expensive, but every bit as fun to drive as the Passat. For an uproarious American experience, take a look at my personal favorite wagon, the Dodge Magnum R/T, which kicks serious gluteus maximus and looks hot.

Volkswagen has finally forced me to adjust my expectations, by delivering an excellent, segment-breaking vehicle. I will look at future Passats and future VWs differently now -- not as the evolution of the bare-bones People's Car, but as a near-luxury brand with a lot to offer for the money.