Ford Ka Collection

Ford has not only made the Ka quicker, cleaner and more economical, it's lowered its price, too. The 1.3-litre unit may be dated, but extensive modifications mean it can still deliver, and the fine low-down torque is ideal in town. With great handling and looks, it's going from strength to strength.

When the Ka arrived six-and-a-half years ago, it caused a real stir. Here was a Ford which looked amazing, was cheap to buy and fantastic to drive. But despite the futuristic styling, there was only one engine choice and it could trace its roots back to the Anglia.

The reason? The more modern motors available were simply too expensive to produce, adding too much cost to the budget car's price. Nevertheless, the Ka has been a huge success, and has had only minor changes since. This is the biggest revision yet, because at last Ford has bolted a new unit under the bonnet. Could this be the powerplant the Ka finally deserves?

Despite being called new, the Duratec in this revised model is still based on the old 1.3-litre unit. However, it has been substantially reworked and fitted with a new head, with low-friction roller bearings which make the motor smoother and more efficient - thus improving the car's performance and emissions. It has already been successfully introduced into the entry-level Fiesta, but with only 67bhp on tap, this engine is sure to be better suited to the lightweight Ka.

Being an old design, there are eight valves rather than the 16 we have now come to expect as the norm - but this means the Ka delivers plenty of usable torque. There is little point pushing the little Ford towards the red line, because every drop of its 106Nm of pulling power arrives effortlessly low down. And the car has at last been equipped with a rev counter - something which wasn't considered necessary in the previous model.

The Ka is certainly no performance machine, but it's perfect for relaxed city driving, and feels at least adequate on the motorway. It's always been a real smile-inducer, though, and is a genuinely fine-handling car. Despite the miserly power output, it's great fun on twisty roads with the kind of high-speed ride that would shame many models from the class above.

In fact, the chassis feels as though it could handle more power - and of course it will get it when the Sportka arrives next month with a 1.6-litre version of the same engine. But even this smaller variant puts in an impressive performance. The 0-60mph dash now takes 14.1 seconds in a car equipped with air-conditioning and 13.7 without - that's 0.6 seconds quicker than before.

Maximum speed is now 104mph, up from the previous version's 96mph, and economy is better, too. In the combined test, the new Ford manages a credible 45.6mpg, which is a 3.4mpg improvement over the outgoing model, and is now comparable to rivals with more modern powerplants. For example, a Toyota Yaris 1.3, complete with 16 valves and advanced variable valve timing, can only beat it by 1.5mpg. The inside still looks funky, too, with the designers making the painted metal on the doors appear stylish rather than cheap. Only the lack of adjustment on the steering wheel gives away the Ka's age. The majority of its rivals offer at least a choice of height movement, but when we searched for the Ka's lever to shift the wheel, we merely popped the bonnet open!

Luckily, the Ford is relaxing for all but the tallest and shortest drivers - just don't expect to carry adults comfortably in the rear seats. The boot isn't huge, either, but at least there is now a remote hatch release button on the dashboard, which means owners won't have to rely on the key as before. But open the price list and you'll be smiling. All versions of the low-budget Ka are cheaper than before.

The line-up now kicks off at £6,495 for the base model, rising to £9,695 for Luxury spec. That compares favourably to the previous car's £6,960 starting price, but the flagship is now more expensive. Our generously equipped Collection will set you back £7,995 - so it's better all-round and now costs £65 less. What more could you ask?

Compact hatch rivals are stumped on price, with VW's Lupo 1.4 weighing in at a hefty £8,620 in mid-range S trim. So whichever form you choose, the Ford Ka is a superb driver's car - and it has just got even better.