Driven: Peugeot 308 Oxygo

Peugeot-308e-HDi It's good to catch up with people you haven't seen for a while. It's the same with cars such as the Peugeot 308, which is often forgotten among the welter of family hatchbacks jostling for your attention – not to mention your money.

Facelifted last year, the 308 appears compact by the standards of the class, especially when compared with rivals such as the Ford Focus. That compact feel continues inside, but the sharply raked screen makes it more like sitting in an MPV than a family hatch. The optional (£370) panoramic glass roof is well worth specifying, providing an even greater impression of space, although three adults in the back would find it a squeeze. Luggage space appears similarly tight, although on an airport pick-up run it swallowed a massive suitcase plus other luggage with ease.

In these cost-conscious times, the promise of almost 60mpg, even on the official EU Urban cycle, is not to be sniffed at. We all know – and Honest John's postbag proves every week – that no amount of careful driving will match those official figures, but this is an impressively frugal car. During the panic buying as drivers filled up in fear of a strike by tanker drivers over Easter, I had to do a return journey of about 320 miles and reckoned I'd got the ideal car in which to do it.

Whether or not you trust computers, I left London with an estimated range of 410 miles after several days of urban use, so there was no need to panic. However, I was still impressed as without being particularly light-footed I still had about 200 miles worth of diesel in the tank. Just as well, since diesel was scarce.

The 1.6-litre e-HDi diesel engine develops a relatively modest 112bhp but is really strong in real-world driving thanks to 200lb ft of torque. It feels like a larger capacity unit, pulling strongly and cleanly from 1,750rpm. There's no point in using maximum revs, just keep it in the torque band for swift yet economical progress. The six-speed gearbox provides a long-legged top ratio for relaxed cruising, while CO2 emissions of 109g/km mean it's inexpensive to tax.

As well as the frugal diesel, eco measures that are part of the Oxygo trim package include stop-start, low-rolling resistance tyres, aerodynamic tweaks and a combined alternator/starter. When combined, the most impressive feature is that it's so unobtrusive, particularly the stop-start system which is one of the smoothest I've encountered.

Peugeots used to be famed for their cossetting ride. After some disappointingly harsh cars, the company seems to be heading in the right direction with the 308, with a suppleness you rarely find in rivals that are trying so hard to be sporty. The interior, too, has benefited from the company's commitment to higher quality materials and build. It's not quite in the league of the newer 508, but it's up with the class standard.

Without excelling in any particular area apart from economy, the 308 still deserves a look. It's probably a three-star car but the e-HDi variant merits the extra due to the brilliant integration of the low-emissions package.

Peugeot 308 Oxygo e-HDi 112

Price: £19,165

Telegraph rating: Four out of five stars

The Telegraph