For

Against

IN an era where downsizing of cars is being encouraged to reduce drivers' benefit-in-kind tax bills, the lower-medium sector has seen a lot of interest lately.

But lower prices and lower emissions are not enough on their own to tempt drivers down from their traditional Ford Mondeo/Vauxhall Vectra upper-medium cars. To really cash in on the downsizing trend, lower-medium models need to be cars that people want to drive.

Today's lower-medium sector is a world away from where it was just a handful of years ago. The Ford Focus began the trend for desirable lower-medium cars with its fantastic chassis and cutting-edge styling.

Honda and Peugeot took a different approach, adopting an almost mini-MPVesque styling route offering much increased interior space in a slightly boxy body.

And now Renault is getting in on the act with a thorough update of its Megane, which has leapt from bland and ageing to fashion leader in one easy step. With styling cues first pioneered on the Vel Satis luxury model, the new Megane looks like no other car in the sector.

From the front the car looks almost conventional but it is at the rear where the Vel Satis influence really comes into effect, with a cut-away rear hatchback door and lights set into an almost flat lower tailgate.

It's certainly unconventional and, in truth, the look works far better on the three-door model (badged Sport Hatch) than on the five-door model that is the subject of this road test.

And while its appearance may dominate discussions, there is another factor which will help Megane grab the headlines – it is the first lower-medium car to achieve a five-star rating in the Euro NCAP crash tests, mirroring the result of the Vel Satis and the Laguna.

With the Megane, it appears that Renault was fed up of playing second fiddle to the Focus and has gone all out to end its domination of the sector. But where the Focus really leads the way is in driving dynamics – it simply has the best chassis in the sector and allows you to exploit the power available, even in 1.6-litre guise.

Styling and crash test results aside, the Megane matches the Focus on driving dynamics. It handles well, has a punchy 115bhp engine, a nice gearbox which offers positive changes and there is plenty of grip.

The Megane is well-equipped, comfortable and competitively priced.

So where does this leave the Megane against its rivals?

In driving terms it matches the Focus. It is better dynamically than the Honda Civic and is comfortably a better drive than Peugeot's 307, which suffers from being a little on the wobbly side thanks to its high-sided styling.

Renault has done everything right with the new Megane – a car which may share its name with the old model but has little else in common. In fact, there are only two things I did not like about the Megane. The key card entry system proved to be unreliable, sometimes taking nearly two minutes before deciding to open the door, and the design of the tailgate is flawed thanks to a sharp right angle of metal which appears at head height when the tailgate is open.

As a driver's proposition the Megane stands up well, but just as important for fleet decision-makers is how the car will perform financially over a typical three-year/60,000-mile operating cycle, which is examined on the right.

Three rivals to consider

P11D price

ALL of our road test quartet are top-spec models, meaning a high level of standard equipment. The Focus in Ghia trim is the least expensive in P11d terms, costing £13,100, £255 more than the Renault.

The Peugeot costs £13,625 and the Honda brings up the rear, costing £13,850. However, it is worth noting that the Honda in SE Executive guise includes leather seats as standard – a £1,000 option on the Focus, £850 extra on the Peugeot and a £500 option on the Renault.

Ford £13,100
Renault £13,355
Peugeot £13,625
Honda £13,850

SMR costs

THE Renault and Honda tie for first place in terms of servicing, maintenance and repair costs. Over a typical fleet operating cycle of three years and 60,000 miles they will cost 2.12 pence per mile to run, narrowly edging out the Peugeot on 2.16ppm and the Ford on 2.29ppm.
However, with a difference of just 0.17ppm between first and last here, it is too close to call on SMR costs alone. All four are very competitive on this front.

Renault 2.12ppm
Honda 2.12ppm
Peugeot 2.16ppm
Ford 2.29ppm

Fuel costs

THE Honda wins this sector thanks to it recording the most economical fuel consumption figures – it returns 42.8mpg on the combined cycle, resulting in a fuel cost of 8.92ppm. The Renault, with 5bhp more than the Honda (115bhp vs 110bhp), records 41.5mpg on the same cycle for a fuel cost of 9.20ppm. The Focus is third on 9.33ppm – it averages 40.9mpg – while the Peugeot brings up the rear on 9.74ppm thanks to its lower economy figure of 39.2mpg.

Honda 8.92ppm
Renault 9.20ppm
Ford 9.33ppm
Peugeot 9.74ppm

Depreciation costs

ONCE again it's a sector win for the Honda, recording the lowest depreciation cost of 13.99ppm thanks to having the highest residual value prediction. CAP estimates the Civic will retain 34% of its cost new after three years and 60,000 miles. The Focus is next on 14.50ppm, with a CAP RV of 30%, followed by the Peugeot on 30% (14.69ppm). The big surprise here is the Renault's poor performance. The trade is obviously sceptical about the Megane's looks – CAP estimates it will retain just 29% of its cost new after three years and 60,000 miles.

Honda 13.99ppm
Ford 14.50ppm
Peugeot 14.69ppm
Renault 14.88ppm

Wholelife costs

WITH three sector wins it is the Honda Civic which comes out on top in wholelife cost terms, costing 25.03ppm to run over three years and 60,000 miles. It is more than a penny per mile less expensive to run than the current leader of the pack, the Ford Focus, which costs 26.12ppm. The Renault Megane comes in third on 26.20ppm, its challenge dented by a relatively poor showing in the depreciation section. The Peugeot 307 brings up the rear on 26.59ppm.

Honda 25.03ppm
Ford 26.12ppm
Renault 26.20ppm
Peugeot 26.59ppm

Emissions and BIK tax rates

EACH of our quartet qualifies for the lowest company car tax banding for 2002/03 of 15% of P11d value. For 2003/04 tax year, which begins in April, only the Honda will remain in the 15% bracket thanks to its lower emissions. From April, the Renault moves up a benefit-in-kind band to 16%, while the Ford and Peugeot move up two bands to 17%. As the bands become tighter, lower emissions prove to be ever more important.

Honda 157g/km/15%
Renault 163g/km/15%
Ford 165g/km/15%
Peugeot 169g/km/15%

Verdict

RENAULT has taken a bold step with the styling of its new Megane and for this it must be applauded. Not only does the car look distinctive but it is also good to drive, well-equipped and very safe. It matches the Ford Focus in most respects but its higher running costs let it down. Honda's fully-loaded Civic SE Executive takes a lot of beating in all areas and is my winner.