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Not all the time, but we have installed our two rearfacing Foonfs in DH's Audi A4. I'm 5'2" and was able to drive without problem, but DH is 5'6" and it was on the tight side for him. He likes a lot of space for driving, though. The most noticeable difference is other storage space. I drive an Audi Q7 usually and always have our double stroller with us, plus Tulas, blankets, food, water, tons of diapers, jackets. Basically I fill up the entire huge vehicle. In the A4 the car seats take up all the space in the backseat and the trunk is small. So I'd have to downsize all the crap I take with me if I moved into the small car all the time.

We have both a smallish/mid-size SUV (Honda CRV) and a large sedan (Acura TL). With two car seats, the sedan has always been just fine. My husband was always able to easily cart around the girls. The only time it made a big difference whether we drove the SUV or the sedan was if we were going on a long trip or vacation. The SUV obviously had more room for backpacks, suitcases, pillows, toys, etc. We could pack a cooler that would be accessible while in the car, whereas the only room for a cooler in the sedan is the trunk, which meant we would have to pull over to access it (not ideal).

So, if you aren't planning on taking road trips with the sedan, and don't need to be able to access your storage while driving (meaning you're okay with trunk storage only), then you should be fine with a sedan! I bet there's plenty of room in the back seat and the car seats will fit fine.

ETA: I should add that we now have 3 kids and don't use the sedan at all anymore, since it won't fit 3 car seats across. But it worked great with just 2.

We once rented a sedan (Nissan Altima) and were able to fit two car seats plus me in the middle. Trunk space was spacious and we were able to fit quite a bit (two suitcases and 1 UB umbrella stroller). I think you should be fine!

I have a tiny Jetta, a RF Foonf, and am 5-7. It is manageable but not my favorite, if money didn't matter I would hands down get a small SUV. Putting and taking out in a RF is hard and LO often bumps her head.

Edited to add this photo. Not a ton of space to get LO (especially my squirmy 2 year old) in or out. Not a deal breaker, but still a total pain that I don't look forward to.

We have a small SUV (Forester) but will be getting a van in the next weeks.
Last summer we rented a Sonata and found it had more room in the back seat. We had an infant seat and a Fllo installed and could both drive (5'-7" & 5'-11") no problem.

I checked out your link and that is one beautiful car! Jetta's are on the tiny side of sedan's so there is a good chance the Volvo backseat is bigger. We had the Foonf FF for about a week, and it was SOOOO much easier to get her in and out, so the struggle is somewhat temporary.

Here are more pictures with LO in her Foonf, when I put her in I have to angle her head then body into the car. And another showing the tiny space between the drivers seat (I am 5'7) and the RF Foonf.

Trunk space! The Jetta and probably many other Sedans are huge! Ours can hold our B Agile and a full cart of groceries!

Depending on what the suv option is, I don't think space wise there's always a big difference between a 2 row suv and a larger sedan. My thing would be the height. I feel safer in an suv than I do in a sedan and for that reason alone I'd get an suv. I had an accord when DD was born and even
Though it's spacious and very safe, I just felt the need to get the height from an suv.

We rented a mid-size sedan for our last vacation and did just fine with rf and ff car seats and alllllll our bags and crap I prefer having our SUV for long trips, but this worked out just fine.