Smarter, sharper and offering far better quality, Renault's third generation Megane family hatchback is the car its predecessor should have been. It's now one of the sector's class-leaders, good enough to make other brands look to their laurels.

There wasn't much wrong with Renault's second generation Megane. It was European Car of the Year in 2003 and still amongst Western Europe's top five best sellers in 2007, its last full year of production. Still, it was never what you'd call a 'premium' product. You wouldn't buy one if you'd been used to running a Volkswagen Golf for example. Nor did it look like the kind of car you could park at the golf club, comfortably elegant amongst the gas guzzlers, its owner wearing the smug smile of the sanctimonious downsizer doing his or her bit for the environment.

The third generation car looks a different prospect. There's no longer an airfix kit look to the styling or to the cabin, wafer-thin panel gaps, classy materials and solid nuggety cuteness making this a car that Volkswagen's disappointingly conservative MK6 Golf should really fear. Peugeot's 308, Ford's Focus, Fiat's Bravo, Toyota's Auris and Vauxhall's Astra are all also clearly within its sights.

The MK2 Megane may have had its faults but lack of driving appeal wasn't one of them. Renault's challenge was to retain this whilst building in a higher quality 'big car' feel. Has it succeeded? The signs look encouraging. There's a new front suspension/subframe arrangement to improve directional precision and a redeveloped power steering system to more swiftly respond to driver input. The rear suspension meanwhile, has been tuned to produce a more responsive, agile ride, as well as offer improved cornering without detracting from comfort. Plus, there are bigger brakes, able to pull you up to rest from 62mph in a class-leading 37 metres.

Even more crucial is the way that the design has retained its top afety credentials. If, for some reason, a tyre pressure monitoring system, plus auto headlamps and wipers don't keep you out of the bushes, then standard ABS, EBD and Emergency Brake Assist should do, while plusher models also get ESP stability control and CSV understeer control.

"Renault had to step up its game with the third generation Megane and it has.."

On the passive safety front, Renault say that their SRP3 set-up (System for Restraint and Protection) guarantees a uniquely high level of protection, taking into account both impact force and the build of occupants. There's the usual bouncy castle collection of airbags but real safety is about more than just gluing inflatable bags around the interior. So it is that the seatbelts have double pre-tensioners, load limiters and are designed to prevent you from sliding underneath them. The headrests are designed to cushion you better in rear impacts, while double impact sensors in the doors enable the side airbags to offer three times more cushioning to your body during a side impact.

The MK3 Megane has a sporty, dynamic stance, thanks particularly to its short front and rear overhangs, a long 2.64m wheelbase, a steeply-raked roofline and a wide track. It certainly exudes a feeling of much higher quality than its predecessor, with thin cut lines between the different body panels. Great care (at last) has also gone into the quality and fit and finish of the materials used and there are nice touches like the soft-touch finish on the dashboard cowling that's resistant to daily use and the ageing effects of sunlight. Or the way that the windscreen wipers are aesthetically concealed beneath the bonnet line.

Climb in and the first thing you notice at the wheel is the innovative dashboard which features an analogue rev-counter alongside a digital speedometer which also incorporates the cruise control/speed limiter display. When this function is activated, the speed selected by the driver is displayed at the top of the speedometer which is itself ringed by a sequence of lights that take the form of an arc around the central display. In speed limiter mode, the red segment lights up as the speed increases, while the selected speed begins to flash if exceeded. Space in the cabin is unexceptional but the boot volume of 372 litres (assuming a spare wheel) figures amongst the best in the segment.

To begin with, only the five-door hatchback bodystyle is on offer but we can soon expect to see the full complement of Megane bodyshapes, including a three-door, an estate, a coupe-cabriolet and a new version of the Scenic mini-MPV based on this car. There are three trim levels: Expression, Dynamique and Privilege.

The engine line-up is a mixture of familiar carry-overs and new arrivals, with biofuel-compatible engines also on the agenda. Most important will be the dCi diesels, sales of which will be focused on the dCi 86 and the particulate filter-equipped dCi 106 units. Both of these engines emit 120g or less of CO2/km, while even the powerful dCi 130 (with pulling power now more readily available earlier in the rev range) manages 135g/km. If that's not enough, your dealer can tell you about a dCi 160 unit (which you'll need to order in dCi 150 form if you want automatic transmission).

Petrol buyers also get the latest Laguna units, in this case the 1.6 16V 100 and 110bhp powerplants, plus you can talk to your dealer about an all-new turbocharged TCe 130 unit. This new, fuel-efficient 1,397cc block packs the power of a 1.8-litre engine (130bhp) and the torque of a 2.0 (190Nm), yet its CO2 emissions are less than those of a 1.6, making it particularly respectful of the environment. The flagship engine, the TCe 180, uses similar technology.

Despite being bigger and roomier, this Megane is an average 8kg lighter than its predecessor. The combination of lower weight and optimised aerodynamics has led to significantly lower fuel consumption and CO2 emissions across the board. Almost 70% of all Meganes sold will feature CO2 emissions of less than 140g/km or be biofuel-compatible. This car also claims to be one of the most socially responsible in its class, being 95 per cent end-of-life recoverable by weight, while almost 12 per cent of the plastics it contains are sourced from recycling, equivalent to an average of 22kg per car.

Renault had to step up its game with the third generation Megane and it has. Bigger and roomier, this car ought to suit down-sizers, feeling much like a larger model to drive. There are plenty of green credentials and the apparently exemplary build quality that we first saw in the larger Laguna. Overall, unless you have a particular aversion to the Renault badge, it's hard to see any significant failings. The result is a car that has gone from being a family hatchback also-ran to being one of the two or three models in the segment that buyers really must consider.

TOP 5 MEGANE DEALS

The results below show the top MEGANE deals on buyacar

	Renault Megane 1.6 VVT Dynamique 2dr Cabriolet Convertible
	ETR	Mthly £278	Saving £5,260	Price £13,487
	Renault Megane 2.0 T 16V Renaultsport 230 F1 Team R26 3dr Spec edn Hatchback
	ETR	Mthly £336	Saving £3,662	Price £16,354
	Renault Megane 2.0 dCi 175 Renaultsport Lux 5dr (Pre-model) Hatchback
	ETR	Mthly £338	Saving £3,881	Price £17,078
	Renault Megane 1.9 dCi 130 Dynamique 5dr Auto (Pre-model) Hatchback
	ETR	Mthly £276	Saving £4,269	Price £13,382
	Renault Megane 2.0 dCi 150 Dynamique 2dr Cabriolet Convertible
	ETR	Mthly £311	Saving £5,882	Price £15,987

typical 13.11% APR

PCP finance quote over 48 months,  10,000 miles pa,  deposit of £1000