Faced with buying a new cheap runabout on a budget of no more than £7,500, you'd be excused for not feeling too enthusiastic. If the secondhand market is to be avoided, you'd think, then something Malaysian or South Korean would probably be called for. But you'd be wrong.

Citroen will wheel out their latest C1 Code special edition as proof. It isn't the cheapest C1 variant you can buy (that honour goes to the £7,195 C1 Vibe). Still, it's not far off and for just £750 more, you get a lot more car.

It's clad in black metallic paint and comes complete with 14" alloy wheels. The smart interior features sleek leather/Alcantara seats and sporty chrome trim. Based on the high specification Rhythm model (which costs £260 less), it's offered in both 3 and 5 door versions and also features a CD player, remote central locking, electric windows and four airbags. Opt for the five-door version and you'll need £8,295.

The C1 aims to offer an unthreatening and fun appearance with a face that looks as if it's either grimacing or grinning depending on the angle at which you view it. The wide wraparound bumper, the rounded bonnet and bulbous headlamp clusters may not endear the C1 to the sort of pimply adolescents who hang around McDonalds car parks and revere Citroen's trendy C2 VTR, but it'll doubtless sell well to those with a little less testosterone coursing through their system. The rear end is very nicely finished with a glass tailgate, big crystal and anthracite rear light clusters and a deep under-bumper assembly. The wheelarches are surprisingly beefy and the rear set are sculpted a little further forward in the three-door body style. The five-door car sees its rear doors meet the rear light clusters in a very neat piece of packaging.

Citroen have been regaining their reputation for bold and exciting interiors of late and the C1 continues that trend. The first impression when looking at the virtually symmetrical fascia is that this must have been a vehicle that was very cost effective to convert to right-hand drive but the design is neat and ergonomically sound. Headroom inside the car isn't at all bad, even for someone well over six feet tall and the big glass area up front gives an airy feel to the cabin. The rear of the three-door car is notably more claustrophobic and is really only suitable for kids and short journeys. Rear kneeroom in the five door car is little better but at least the car's beltline is a little lower, making it feel a little less hemmed in.

"The C1 Code represents a sassier way of saving money at the budget end of the motoring spectrum.."

There's a circular theme to the dashboard instruments with the main binnacle, separate rev counter and air vents all adhering to this theme. Taking a lead form the Mitsubishi Colt and Smart Forfour, the Citroen C1 uses a translucent material for the heater control system, in this case glowing a soft orange whenever the lights are turned on, mirroring the colour choice of the driver information and audio system displays. All four seats are trimmed in two-tone material with a choice of fabric or velour finish, complementing the door panels. The front seat backrests are hollowed out to provide a little more rear legroom for back seat passengers, but there really is only so much that can be done with a car with a 2.34 metre wheelbase.

Citroen have learned a whole bunch of lessons from their experience of MPV-style vehicles and the C1 offers no fewer than twelve storage compartments dotted about the centre console, dashboard and doors, with the door bins easily capable of holding an A4-sized atlas. Total luggage room with the rear seats in place is quoted at 139-litres, but drop the rear seats and there's an impressive 751 litres of space. This makes the C1 a car that can do more than just a light shop. Parking at the supermarket for the weekly mission isn't going to present too many difficulties. At just 1.6m wide, the C1 will easily be able to take advantage of those awkward spaces next to the concrete columns that are so often rejected. What's more, at just 3.4m long, you'll probably be able to access the tailgate while still tucked safely into your bay, away from errant trolleys and distracted drivers.

Equipped with a nimble 1.0i (68hp) engine, the C1 Code delivers lively acceleration and a reasonably responsive driving experience. For the economical and environmentally conscious, Citroen's supermini returns a very fuel-efficient 60mpg on the combined cycle and ultra-low CO2 emissions of just 109g/km.

Some buyers may have reservations about the safety of such a minute car. Nudge up against a behemoth 4x4 in a car of the C1's size and it's easy to feel rather threatened, but the C1 is likely to have better safety systems than many a sizeable SUV. As well as a specially developed body structure that incorporates crumple zones and impact absorbers at the front and rear, the C1 also boasts ISOFIX child seat anchor points, reinforced doors and up to six airbags. What's more, it's also well equipped to avoid a fender bender in the first instance with anti lock brakes with electronic brakeforce distribution and corner stability control.

The C1 has also been designed to limit the consequences of a pedestrian impact - wise indeed for a car that will doubtless spend much of its life in the urban environment. The front end features no sharp edges and impact absorbers up front also help to limit leg injuries. There's plenty of clearance between the impact absorbing bonnet and the top of the engine which means that shock is dissipated without coming into contact with anything hard.

Overall, the C1 Code represents a sassier way of saving money at the budget end of the motoring spectrum.