Our test XC60 has been through much during its time with us--15,605 miles, to be exact. After a year of piloting Volvo’s smallest SUV through city streets and rural roads, on short trips and long hauls, during four seasons of weather and unending road construction, we’re pretty impressed. XC60 stands out as a roomy and refined entry among this ever-growing class of premium-compact SUVs….but we didn’t always feel this way.

Though we’ve been won over by this cute ‘ute, it took a couple months to work the kinks out, and there are some we simply can’t get past.  

Power has always been plentiful. Our test T6 model’s 281-horsepower turbocharged 3.0-liter inline 6-cylinder engine was up to the task, be it city stop-and-go travel or highway cruising. Turbo lag was nearly non-existent, though some testers complained of non-linear throttle action in around-town driving.

Test-Car Specifications Model: T6 Engine: turbocharged 281-horsepower 3.0-liter I6 Transmission: 6-speed automatic Total Miles Driven: 15,605 miles CG Observed Fuel Economy: 19.5 mpg Base Price: $37,200 Major Options: laminated panoramic roof; Multimedia Package (Dynaudio premium sound system with Dolby Pro Logic II Surround Sound, navigation system with real-time traffic, remote control and DVD map data, and rear park assist camera); Climate Package and child booster seats (heated front seats, heated windshield washer nozzles, high-pressure headlamp cleaning system, rain sensor, humidity sensor, interior air quality system, dual integrated outboard two-stage child booster seats with adaptive seatbelts and power child locks on rear doors); and metallic paint Price as Tested: $42,900 Problems During Test: burned out brake light

At first, this power came at a price. The editors routinely saw fuel economy of 15-17 mpg during the first half of the test. During the year, however, we were pleasantly surprised that XC60’s fuel economy steadily improved to an average of 19.5 mpg when it left us last month. Though not spectacular for a turbocharged 6-cylinder, we’ll take it over the crummy fuel economy we saw early on. Even better, this premium vehicle doesn’t require premium-grade gas.

The savings end there, though; XC60 is no bargain. Our loaded tester came in at $42,900. Yes, this is the premium-compact-SUV class, and its competitors are similarly priced, but our tester didn’t have such features as remote engine start or blind-spot alert, which are separate options. Heated seats are also extra, though many competitors offer them as standard equipment.

To make matters worse, the navigation system, which was almost unanimously hated by the editors, was an expensive option. It came as part of the $2,700 Multimedia Package (Dynaudio sound system; navigation system with real-time traffic, remote control, and DVD map data; and a backup camera.) Loathed for its strange button placement (on the steering wheel behind a spoke), over-complication of tasks, and small screen, the editors called this one of the most confounding nav systems ever used. Further annoying, a remote control could also be used to control the nav, which most testers agreed would quickly be lost or broken if kids were involved. After a year of testing XC60 and its nav, most of us are still scratching our heads. Luckily, Volvo updated this system for 2011. We have yet to test it, however.

We’ve warmed up to the rest of the cabin. Inside, some found our test vehicle’s black-on-black interior austere and preferred some warmer wood accents, others liked its sporty simplicity. Another feature we’ve come to appreciate is Volvo’s City Safety system. This accident-avoidance feature automatically activates the brakes at low speeds to avoid or reduce the severity of a rear-end collision. I’ll spare the juicy details; it worked as advertised. Volvo recently updated the system to also recognize pedestrians. New for 2011, Pedestrian Detection with Full Auto Brake uses radar and camera technology to watch out for pedestrians in front of the car.

Another safety feature that you don’t find very often are XC60’s integrated booster seats. Though a $500 option, they come in handy when traveling with young kids. The National Highway Traffic Safety Administration states that kids should use boosters until they are 8 years old or at least 4-feet 9-inches tall.

During our time with XC60, we had only one very minor problem and one recall. We took it in for free scheduled maintenance without incident (XC60 comes with 3 years or 36,000 miles of free maintenance). Though our oil changes were free, the dealer charged $39.95 to rotate the tires. Just before our first service appointment, we noticed that the right rear brake lamp burned out; it was replaced free of charge. During that visit, the dealer also updated the software control module because of a recall. According to NHTSA, “Under certain conditions, the software within the central electronic module may not send a signal to the fuel pump electronic control module. This missing signal inhibits the start of the fuel pump.” This issue was also fixed free of charge at the dealership.

Other XC60 pros include easy fold-flat seats that increase cargo volume and a fairly tight turning radius. Both of these advantages make this vehicle a good city car. It has parking-lot friendly dimensions but can comfortably hold five people and their stuff. In all, we enjoyed our year in the XC60. Its balance of power, handling, and comfort make it a Recommended choice for those who desire something small, yet upscale.