How high is your iQ? Four into three won't go, you will answer, and consider that it is a silly proposition to start with. But in motoring terms Toyota will prove you wrong. Their new city car, the iQ, is just three metres long but despite its tiny size it can take four on board, at a push.

This is just one of the amazing aspects of the Japanese answer to the Smart car, ForTwo, which has been such a success on the continent because of the easy parking and economy benefits. Toyota went to the drawing board and came up with their version of what a city car should be and they deserve to have a hit on their hands.

First this mini version of a mini has already got a five-star NCAP safety rating which is a great bonus when you are trying to lure the young posh set, and commuting mums on school runs, into a small car. Part of the reason is that it comes with nine airbags, stability control and traction control programmes as standard.

The best part of driving the iQ is around town. As the saying goes you could park it on a sixpence. The small turning circle is truly amazing and even the smallest spaces are yours for the taking. It is surprising how quickly one warms to a car that is so user-friendly in traffic that you almost find yourself volunteering to do the short runs for the sheer pleasure of outgunning drivers of the bigger models as they search hopelessly for places.

Out on the open road the surprises continue. Young bloods need not dismiss this as just a city runabout – it can keep up with the best of family saloons on the motorway. It zips along with gusto and the wide track and body width gives a solid roadholding drive with no fear of being blown off track. True, it is a bit bouncy on rough surfaces but it surpasses most superminis in cornering agility and there are few fears of getting it wrong even at speed.

So what are the downsides to this little marvel? Well space comes to mind immediately. The boot is a mere 35 litres so it is a question of passengers or cargo when you go shopping, if you have to drop the rear seats where one adult or 2 smaller bodies can fit in. Maybe on mature reflection a four-seater is stretching it – some would say that a three-and-a-half-seater might be a more realistic approach for sizeable bodies. Up front things like the glovebox are miniaturised and the phrase 'two's company, three is a crowd' comes to mind if one is considering a long journey.

Second downside for the trendy young drivers the iQ is targeted at is the cost. Prices start at a hefty €13,695 right up to €20,400 which gets you a 1.4 litre diesel engine and for which there will be little or no demand at this price. For under €17,000 you can get the highly popular new Ford Fiesta, a 4/5 seater with a 1.4 litre diesel engine and with 300/980 litres of boot space. No contest.

The entry level comes with a one-litre three-cylinder engine putting out 68 bhp at 6000 rpm and 91 Nm of torque. It can return 4.9L/100km (57.6 mpg).

The model up from the entry level, the Luna, which costs €16,695, has air conditioning, heated front seats, fog lights and heated wing mirrors over the Strata. Both have ultra-low C02 emissions of under 100g/km and road tax charges of €104.

Good for driving but too pricey.