A NEW BMW for under €30,000, and an A-Band road tax rating of €104 – two firsts for the prestigious kidney-grille marque. And full credit to the Munich engineers' approach that frugal does not mean less fun or a drop in quality.

The 1-series 116d also has other surprises. It is not powered by a 1.6-litre diesel engine as the badge might suggest, but a two-litre power plant that has been finely tuned to be as kind to the environment as to the bank balance or overdraft.

BMW boast a fuel consumption figure of 4.4L/100 kms which is more than 60 mpg and the saving on VRT and road tax comes from the clean burn diesel engine which gives an exceedingly low 118g/km C02 reading.

There has got to be a penalty in the performance with an engine so finely tuned, you may suspect. But no, the 116bhp output delivers 260Nm of torque at 1750rpm and the transfer of power is ultra smooth.

So welcome the BMW with the revised two-litre diesel engine that brings top economy to a premium class car, and at a price not much above run-of-the-mill family cars. The price tag may be just under €30,000 but, with BMW Ireland's strategy of importing just registered-no mileage cars from the UK, called the Sterling Collection, it is possible to buy this model for under €26,000 if you shop around and get a dealer eager to make a sale. Now that should not be too hard to find these days. Good value does exist for all Sterling-sourced BMWs these days in the showrooms.

A good value price to begin with but buyers will eventually realise that an even bigger bonus will be in the residual value which is becoming increasingly important as the glut of second hand models forces down prices in this sector. But that will not be the case with such a thrifty BMW. There will be thousands of euro saved on a trade in because the 1-Series has the right pedigree and credentials to make it a very hot seller in the second hand market.

The high economy has been achieved by BMW's Dynamic Efficiency programme which uses stop-start technology: automatic engine cut-off at traffic lights and in gridlock with restart when the clutch is pressed. Low-rolling resistance tyres add to the economy and there are more efficient electric motors.

Behind the wheel the new offering is no slouch. It takes a respectable 10 seconds to reach 100kms/h and the top speed would land you in jail. The steering is precise, gears and clutch light to the touch and up front the seats are firm but comfortable. In the rear it is a bit awkward getting into the three-door version but leg room and head room are better in the five-door version. Boot space is 330 litres.

There are Sport and ES trim levels to choose from and goodies available include 17" alloys and sports seats up front. The 116d is a good looking car that will find its way on to the driveways of those who are facing a downsize but still want to have pride in their motor, and also those who because of the keen pricing can now aspire to be first time owners of a brand new BMW, bank managers permitting.