Costs from £9495 and packed with kit. Click 'read full article' for video of the iQ in action.

This is the new iQ, Toyota’s take on the ultra-frugal city car. On sale now, it features a revised version of the 1.0 petrol engine that Toyota uses in its Yaris superminis. That engine here, if teamed with a manual gearbox, produces ultra-low carbon dioxide emissions of 99g/km – matching Volkswagen’s Polo Bluemotion – and fuel economy of up to 65.7mpg overall. Its low CO2 rating means it is among the few cars exempt from road tax charges.

Watch a video of the iQ in action

The car may be small. But it’s no basic urban runabout. There are two trim levels, iQ and iQ2, and even the entry model packs nine airbags, alloy wheels, air conditioning and a six-speaker stereo. But it’s not cheap, either: prices run from £9495.

That said, it ds include safety features usually only fitted to much larger, more expensive cars. These include a knee airbag and a rear curtain airbag in addition to the more usual front, side and side curtain ‘bags, while anti-lock brakes, electronic brakeforce distribution, vehicle stability control, steering assist and traction control are all standard.

It’s a four-seater and Toyota says it packs sufficient space for three adults and a child to travel comfortably over long distances.

Satellite navigation and leather seats are the only extras listed, although there’s also a choice of styling and extra equipment packs priced from £250-£400.

Orders for the car can be placed now, and early customers should get their cars by January.