The expanse of choice for drivers looking to make the most of the lower benefit-in-kind tax bands, but still get into more prestigious brands, continues to grow.

The S60, Volvo‘s most appealing attempt yet at taking on the premium German brands, is now available with a 115hp 1.6-litre engine, under the company’s low-CO2 Driv-e banner, taking it well into what’s currently the lowest BIK band thanks to emissions of 114g/km. It’s also available with all four trim levels, including the sporty styled R-design specification, although we’ve sampled the top-spec SE Lux model. The S60’s estate sibling, the V60, is also on sale in Driv-e form, with the wagon coming in at 119g/km and 62.8mpg.

The S60 is the most efficient compact premium model on sale, with the exception of BMW‘s 320d Efficient Dynamics at 109g/km, but it achieves this by using a lower-power engine than the German brands, which can offer sub-121g/km models with significantly more performance.

But the S60 counters that by being well-equipped versus its rivals, and as the 115hp engine is good enough around town that extra power isn’t really missed. Picking up speed when on the move is the only time where the lack of poke is noticeable, with the frequent need to drop down a gear. But the combination of good ride quality, comfortable seats and a theoretical range of more than 800 miles – proven in the real world on the car’s launch event – make for a highly competent long-distance cruiser.

The Driv-e S60 is the only model in the range to need servicing every 12,500 miles rather than the 20,000-mile intervals enjoyed by all other S60s and V60s. The only other usability drawback is the tiny boot, 339 litres compared with 460 litres for a BMW 3-series or 480 for an Audi A4.

Volvo is caught somewhere in the middle of volume and prestige brands, and the firm’s residual values reflect this, coming in a couple of percentage points behind Audi and BMW at an otherwise respectable 32.8%.

That means a whole-life cost that can’t match the German brands, but a lower P11D than most means it’s in the same ballpark.

If horsepower and load-lugging aren’t key priorities, and a classy, comfortable and tax- and fuel-efficient car are, then the S60 offers a rare competitive alternative to the established mainstream.

Volvo S60 Driv-e 1.6D SE Lux
P11D price £27,390
Model price range £22,495-£36315
Fuel consumption 65.7mpg
CO2 (tax) 114g/km (13%)
BIK 20/40% per month £59/£119
Service interval 12,500
Insurance (1-50) group 27
Warranty 3yrs/60,000mls
Boot space 339 litres
Engine size/power 1560cc/115hp
Top speed/0-62mph 121mph/10.4secs
On sale 2011
Score 7/10
Verdict Competitive choice
on all levels