Peugeot‘s replacement for the 207 represents a rare but sensible move in that it’s significantly smaller than its predecessor.

It’s lighter too, by around 15%, and a raft of clean and frugal engines claim to have hammered running costs down and boosted the appeal to fleets.

The 208’s ride is most impressive for a supermini, comfort being the car’s strongest suit, while refinement is almost as good, with the exception of the clattering sound from the 1.4-litre diesel engine under acceleration.

The engine is no ball of fire but it performs well considering its modest size and power output. Business drivers tackling longer-legged journeys would be better off with one of the 1.6-litre diesel options, though, as the smaller unit struggles at motorway speeds.

Performance aside, the 1.4 HDi’s running costs are superb at 74.3mpg and 98g/km with an overall cost per mile figure of 33.2p. Plump for the Active version as tested here and a 20% taxpayer will shell out less than £30 in BIK. Even greater value can be found elsewhere within the range, as the cleanest 1.4 e-HDi variant emits 87g/km and returns a claimed 83.1mpg.

The sore points make themselves known in the 208’s steering, which is dull and provides no feedback to the drive. Despite the dashboard’s relatively well thought-out presentation, Peugeot hasn’t freed itself from the somewhat cheap and nasty materials for which the interiors of its small cars have become renowned.

If it’s down to company car drivers’ personal preferences, then Ford‘s Fiesta, will trump it every time. It’s much better to drive and ergonomically superior, but you simply can’t ignore the Peugeot’s excellent costs, nor the fact that every diesel variant emits less than 100g/km, hence why it remains a strong fleet proposition in this sector.

Peugeot 208 1.4 HDi 70 Active
P11D price £13,440
Model price range £9995-£17,845
Residual value 36.9%
Depreciation £8590
Fuel £4996
SMR £1605
VED £0
National Insurance £779
Cost per mile 33.2p
Fuel consumption 74.3mpg
CO2 (tax) 98g/km (13%)
BIK 20/40% per month £29/£58
Service interval 12,500 miles
Insurance (1-50) group 11
Warranty 3yrs 60,000 mls
Boot space 285/1075 litres
Engine size/power 1398cc/70hp
Top speed/0-62mph 101mph/15.5secs
On sale June 2012
Score 8/10
Verdict Great costs and
strong in some areas
but rivals are
more desirable