Fiat Panda Multijet

On paper, things start well for the diesel version of the car which we drove with petrol power last week. As well as being incredibly light for an oil-burner, the powerplant benefits from Fiat's latest common-rail technology, which is sophisticated for such a small engine. Drivers should therefore spend more time on the road and less at the pumps, because the Panda can average 66mpg, according to the manufacturer. The unit also meets the latest European emissions requirements, avoiding the three per cent tax levied on many other diesels.

However, there are a couple of weak points with the combination. The engine rattles when idling, and under hard acceleration the noise continues to intrude into the cabin, particularly at higher revs. It's not all bad news for the Multijet, though, as it has a reasonable amount of mid-range punch, especially once the turbocharger kicks in.

The engine becomes more responsive above 2,000rpm, but really gains extra urge above 2,500rpm. And on the motorway, it excels over its petrol siblings. The Panda is capable of tackling long hill climbs with less of the constant gearchanging required in the petrol and once it's up to speed, the diesel becomes more refined and relaxed. It means that the Panda is a surprisingly good long-distance motor, considering its diminutive dimensions.

All this seems like welcome news for those who want to buy and run a car on a budget - but in this case, there is a catch. On the Continent, the diesel commands a similar cost premium as Fiat's Punto JTD, which adds an additional ΂£1,200 or so to the price of a petrol version. As the latter is expected to be around ΂£6,000, that extra cost makes this version of the Panda suddenly seem expensive.