The Fiat 500’s four-year reign as BusinessCar readers’ favourite city car has finally been brought to an end. The Volkswagen Up has taken its place – and deservedly so as it’s a truly intelligent small car that moves the segment’s game along in a big way.

Compact though the exterior is, the inside has been carved out exceptionally well. Yes, it’s small, but there genuinely is enough room for a pair of average-sized adults in the rear, and the ride and refinement are also impressive given the size of the car.

A single 1.0-litre petrol engine is the only choice here but it makes perfect sense. It’s available with 60hp or 75hp, which doesn’t sound like much but in practice is peppy and responds well to a little enthusiastic driving. Running costs are suitably minimal too, with fuel economy ranging from 60.1mpg through to 68.9mpg, and CO2 no higher than 106g/km with a low of 95g/km.

The Seat Mii and Skoda Citigo are near identical alternatives, but the VW‘s higher-class interior and badge appeal give it the edge for desirability, and even though it’s the priciest, the Up’s P11Ds range from £8040 to £11,775, so it’s still an affordable car.

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