Virtually everything about the 2005 Jeep Grand Cherokee is new - including the price.

In an unusual move for a completely revamped model, the third-generation Grand Cherokee is arriving in showrooms with a noteworthy price cut.

The list price, including destination charge, of $26,775 for a two-wheel-drive, V6-powered, base Laredo model is at least $1,635 less than its predecessor's. It's also more than $700 less than a comparable 2005 Ford Explorer and more than $1,600 less than a Chevrolet TrailBlazer.

The starting price for a V8-powered 2005 Grand Cherokee also dropped by about $1,000.

Yet the new Grand Cherokee - the flagship sport utility vehicle of the Jeep line - has been re-engineered for more power, a quieter ride, better on- and off-road dynamics and more comfortable interior.

Jeep officials credited engineering efficiencies for the price reduction.

But they also noted there are at least 27 competitors to the Grand Cherokee now. The model originally debuted in 1992 in a far less crowded mid-size sport utility market.

The look of the new Grand Cherokee hasn't changed radically. Its styling lines appear to be crisper, and the vehicle has round, jeweled headlamps at the sides of the familiar seven-slot grille.

This is the first Grand Cherokee to offer a Hemi V8. The high-powered 5.7-liter engine, generating best-in-class 330 horsepower and 375 foot-pounds of torque at 4,000 rpm, moves the SUV along powerfully. It's available as an option on the top Limited 4WD model, and the five-speed automatic manages the power delivery smoothly.

When equipped with the Hemi, the Grand Cherokee has the segment-leading towing capacity of 7,200 pounds. This is more than some full-size trucks can tow and compares with the Explorer's maximum of 7,140 pounds.

To help fuel economy, the Hemi in the Grand Cherokee is the first in an SUV to include cylinder deactivation, which automatically turns off half of the engine's eight cylinders when they're not needed - when the vehicle is cruising, for example.

Still, the Grand Cherokee with the Hemi won't win any fuel-economy awards. It is rated at 14 miles a gallon in city driving and 21 mpg on the highway.

Jeep also continues to offer the 235-horsepower, 4.7-liter, single overhead cam, Power Tech V8 from last year. Peak torque is 305 foot-pounds at 3,600 rpm, but the fuel economy rating is nearly the same as for the Hemi.

The base Grand Cherokee engine is a new, 3.7-liter, single overhead cam Power Tech V6 that has more horsepower - 210 - than the 4-liter inline six cylinder it replaced. Yet it produces nearly comparable torque of 235 foot-pounds at 4,000 rpm.It is standard on all Laredo models and powers the two-wheel-drive Grand Cherokee well. But it has less power than the six-cylinder engines in the Explorer and TrailBlazer.It's also not a fuel miser. In the test vehicle, I managed only 15.7 mpg in mostly city driving. This compares with the official rating of 17 mpg. It is rated at 22 mpg on the highway.What's impressive in the Grand Cherokee is how quiet the interior is now. I scarcely heard any wind noise, save for a bit around the outside mirrors. Jeep engineers even redesigned the vehicle's standard roof rack to reduce wind noise. And the V6, while audible, is not nearly as loud as before.There also was little road noise in the test vehicle, and passengers ride on supportive and generous front seats whose cushions extended all the way to the backs of my knees.Vehicle dynamics are vastly improved, thanks to new front and rear suspensions. Body sway is noticeably minimized, and the Grand Cherokee tracks much more accurately on twisty roads. I scarcely felt a jolt riding on-road in the Grand Cherokee, save for when I rolled over a sizable pothole.Headroom and legroom, front and back, remain about the same as before. But hiproom in the back seat of the Grand Cherokee has shrunk from 50.9 inches to 45.8 inches.It's not likely to be a big problem unless three adults sit back there. And then the middle person won't have a head restraint, will have to sit on a rather hard seat area and must arrange his or her feet around the hump in the rear floor.There is no third-row seating; there are Explorer and Trailblazer models that do offer seating for seven. Jeep officials say they will introduce a larger, new vehicle next year with three rows of seats.I do appreciate the large rear windows that open nearly all the way in the Grand Cherokee. Cupholders work better in the new model.Cargo space is 34.5 cubic feet behind the second-row seats and grows to 67.4 cubic feet if the rear seats are folded down.This compares with a maximum 87.8 cubic feet in an Explorer and 80.1 cubic feet in a TrailBlazer. Both vehicles are longer than the Grand Cherokee.It took some time for me, at 5 feet, 4 inches, to get comfortably positioned behind the steering wheel so I could also brace my left foot on the dead pedal. This was true even when I used the power adjustable brake and accelerator pedal feature. The Grand Cherokee wheel tilts up and down, but doesn't telescope.The National Highway Traffic Safety Administration does not provide crash test ratings for the 2005 Grand Cherokee. Because the 2005 Grand Cherokee is a new generation model, Consumer Reports magazine does not provide a reliability rating.