Engine options are a 999cc three-cylinder petrol engine, with 60-, 70-, 83- or 97bhp outputs, or a 44bhp 800cc diesel. We’d opt for the 70bhp petrol model, because it's as economical as the entry-level petrol but noticeably livelier and more capable out of town; the diesel is almost unbearably slow and best avoided.

Power steering is only an option, yet without it, parking is more hassle than it should be. Then there's the ride - this tall, short-wheelbase car needs stiff suspension to stop it tottering through bends, so imperfections in the road surface are transmitted to occupants in magnified detail. The front tyres run out of grip pretty quickly, too, but it's comparable with many other city cars.

The biggest disturbance comes from the three-cylinder engine, which sits just behind the seats. It emits a distinctive thrum whenever you touch the accelerator and, although the sound is far from unpleasant, it becomes tiring on long journeys. A clutchless semi-automatic gearbox is standard, but up-changes are jerky unless you ease your foot off the accelerator.

Very low running costs are guaranteed whichever model you choose. The Fortwo is cheap to insure, and even the most powerful engine averages 43.5mpg in town and an impressive 54.3mpg on average. On the down side, Smart salesmen are reluctant to offer discounts.

Running costs will be very low. The Fortwo is cheap to insure, and it holds its value surprisingly well – most models will sell for around half their original new price three years down the line. Even the 97bhp Brabus returns 54.3mpg, and the 60/70bhp models – which incur just 10% company car tax - do 65.7mpg. The diesel? An astonishing 85.6mpg.

All Fortwos have a stability control system that helps you keep on the road in tricky conditions. Driver and passenger airbags are also standard, but it's disappointing that side airbags are only optional. An engine immobiliser means thieves will struggle to drive it away, but the absence of deadlocks diminishes the car's security. You also get charged for a lock on the glovebox.

The distinctive interior is well laid out and has big, user-friendly buttons and dials. However, some people will struggle to make themselves comfortable, because there's no seat-height adjustment and the steering wheel is fixed. If you want a brightly trimmed interior, you'll have to go for the top-trim Passion model.

Practicality is limited because it has only two seats, but there's enough room for a pair of broad six-footers. Wide-opening doors mean it's easy to get in and out, and although the boot isn't massive, its 220-litre capacity compares favourably with other city cars.

In entry-level Pure trim, the Fortwo is poorly equipped, getting a CD player but little else. The sporty Pulse adds a rev counter, electric windows, a panoramic glass roof, alloy wheels and steering wheel-mounted gearshift paddles, while more luxury-orientated Passion cars do without the paddles in favour of a fully automatic programme for the clutchless gearbox (optional on other models) and air-conditioning.