Join me, if you will, on a journey back through time. We'll set the machine to 1995, a gentler time before ASBOs were invented, when the War on Terror had yet to be dreamed up and when a humorous night's entertainment could be had by reading a Rover service manual. If you were shopping for a stylish hatchback, the options were pretty thin. Citroen Xantia? SEAT Cordoba? Vauxhall Astra? No, me neither. Renault's Megane was doing decent business and the Megane RN 1.4e was priced at £10,690. Spool forward to the present day and you can get a 1.4-litre Megane for £8,988. This is the sort of progress I like. By 2050 I might well be tempted.

Even as it stands, the Megane Freeway looks a conspicuous bargain. By any measure, £9,000 doesn't buy you a whole lot of new car these days. Even something like a base model Kia Cee'd would bust that particular budget. Suddenly the Megane Freeway looks a very smart piece of business indeed.

This price represents a saving of around £2,700 on the entry-level Megane Authentique upon which it's loosely based. This, in effect, means that you're getting a full-sized family hatch for the price of a supermini. Targeted at retail buyers, the Freeway comes equipped with anti-lock brakes with electronic brakeforce distribution to direct maximum stopping power to whichever tyre can best deploy it. There's also electric front windows and Renault's smart keyless entry system which uses a card that can be slipped into a jacket pocket without tearing holes in the liner. A trip computer is also standard equipment and the only option is metallic paint.

"Even with this budget price, it's good to see Renault hasn't compromised on safety"

This generation Megane came in for a revision last year, with Renault sensibly deciding to gently massage their winning formula rather than drastically change it. More observant members of the public might spot elongated, sleeker headlamps and alterations to the grille which see everything come together in a 'V' shape either side of a more prominent Renault badge at the front. The rear benefits from it's own re-sculpted bumper and revised light clusters while, inside, the instrument binnacle features chrome-ringed dials with white background lighting.

The 1.4-litre version we examine here represents the first rung of Megane ownership and to date, the models fitted with this engine have sold very well. Unlike certain other variants, the Freeway is only offered with the five-door hatchback body so if you're looking for a cut-price Sport Hatch or Coupe-Cabriolet, keep looking.

The engine is one that we have become fairly accustomed to. Fitted to the Clio and the previous generation Megane, it has been slightly breathed upon to produce 98bhp at 6,000rpm. You'll need to work it hard to get near Renault's posted performance figures, but 60mph in 12.5 seconds and a top speed of 114mph are perfectly respectable outcomes. Drive in a more relaxed fashion and you can expect to average around 42mpg.

As with all contemporary Renaults, safety is a priority. Take Renault's anti-submarining airbag, a device which leaps forth from the seat cushion to protect the pelvis. This replaces the traditional (and some would say uncomfortable) hump at the front of the seat and is a neat solution that provides both comfort and unparalleled safety, effectively making it impossible to slide beneath the seatbelt in the event of an accident. There are also twin front and side airbags with full-length curtain bags to protect passengers from flying glass.

It's just as well you've got all that safety equipment because you may well spend a good deal of time admiring the Megane's reflection in plate glass windows. Most of the attention is drawn to the rear, the Megane being treated to an Avantime-style bustle back. Rather than tone down the design, however, Renault exaggerated it, creating a crazily intersecting riot of straight lines and arcs. When Patrick Le Quement, Senior VP of Renault Corporate design talked of "the understated dimensions of the boot" you really had to wonder whether he was looking at the same car. Perhaps Patrick merely has a talent for understatement as well as design.

The underpinnings of the car are as modern as its styling. In partnership with Nissan, Renault has developed a new 'C Platform' which is currently the base for seven different Megane II body styles. Over 3 million of these vehicles were sold between 2002 and 2006 in Western Europe alone so it's fair to say that the Megane hit the ground running.

No matter how striking you may find the exterior styling, for many the biggest surprise will come when they drop into the driver's seat of the Megane II. The design is neat without being gratuitously radical, but the real revelation is in terms of the quality of materials and finish. It's almost as if a Renault designer's company hack was rear-ended and he got an Audi courtesy car for the week. Soft feel plastics, quality fabrics and a cohesive design philosophy means a not-so-fond farewell to old-school Renault interiors, many of which were built with the visual drama and structural integrity of a film set.

You had to put up with that back in 1995 if you bought an affordable medium range family hatch. Things have got better and things have got cheaper. What's not to like?