I think Norm was arguing that by folding the front seat he can make up for the Encore's smaller rear cargo area. This will depend, though, on what one is carrying and on whether one has a passenger. I like the idea of this feature myself, but it's offered on fewer and fewer cars, suggesting that few people care about it.
The Honda Fit's front passenger seat also folds to extend the cargo area--sort of. Instead of folding forward, it can be reclined to form a semi-flat surface with the rear seat. This does expose the seat fabric to cargo.
Even without reclining the front seat, the Fit comes pretty close to the Soul in cargo volume--it's very efficiently packaged. Unfortunately, to do this they placed the fuel tank under the driver seat, so it's not very large and tall people will find that the seat doesn't go very far back.
Be sure to pay close attention to seat comfort in the Fit. I hear more complaints about seats in Hondas than all other cars combined. I personally find the lumbar bulge and headrest position uncomfortable in some Hondas.
Some further thoughts:
Rental car companies usually maintain their vehicles well, so I wouldn't be concerned about how well it was maintained. A larger question is how well it was treated by those who rented it. I'd closely inspect it for any signs of abuse.
One thing to remember with Kias is that the warranty is 5/60, so you would still have 14,000 miles left on the warranty. (The 10/100 powertrain warranty does not transfer to the second owner.)
Could the answer be a different Soul, one that wasn't previously a rental? Are other used Souls that weren't previously rentals much more expensive than this one?
On depreciation...Hondas continue to retain their value better, sometimes much better, than Kias. This is because people expect them to last longer, and they often do. Still, I've long thought that people pay crazy money for used Hondas. This has enabled Honda to charge more for the cars when new, not so much when comparing sticker prices but definitely when comparing actual transaction prices after discounts and incentives.
The upside of cars that are relatively expensive when used: they'll keep holding their value better. This is mostly a factor if you'll be selling or trading the car within just a few years. The longer you'll keep the car, the less depreciation will matter.
The upside of cars that don't hold their value: they're cheaper to buy now. This is somewhat the case with the Mazda3 LectroFuel suggested. It's even more the case with the Buick Norm suggested (as he tends to do), the Kia Soul you're considering, and hatchbacks like the Kia Forte5 and Hyundai Elantra GT. The last two are heavily incentived and discounted when new and should be very affordable used.
