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Best small company cars 2021

If you work in the city or just want to keep costs as low as possible, a small company car can be an ideal choice. Here, we round up the best on the market...


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by
Darren Moss

Choosing the right company car can be a tricky business, because as well as wanting a good car in its own right, you also need to be mindful of how much it will set you back in terms of company car tax. While this amount differs depending on whether you're a 20% or 40% tax payer, you'll want something with low CO2 emissions to keep the figure as low as possible

Here, we're looking at the best small company cars, comprising small hatchbacks, city cars and small electric cars. In each case on the list below, you can see the P11D price of our preferred model, as well as how much it will cost you if you're a 20% or 40% tax payer. And don't forget, you can read more about each car in our dedicated reviews, and see how much we can save you through our free New Car Buying service.

10

Ford Fiesta

What Car? Target Price from

£15,661

RRP from £16,645 to £27,080

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Model 1.0 Ecoboost 125 Hybrid ST-Line Edition 5dr | CO2 117g/km | P11D price £20,930 | BIK tax rate 2020/21 @20% £1088.36, @40% £2176.72

The Fiesta consistently ranks among Britain's best-selling new cars, and we recently named it as the best small car to drive at our annual Car of the Year Awards. If you're looking for a small car that also offers engaging handling and a peppy petrol engine, you can do no better. This version is also a mild hybrid, so it should help to keep your fuel costs in check, while ST-Line Edition trim gets you sporty styling and larger, 17in alloy wheels.

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Pros

  • Brilliant to drive
  • Punchy Ecoboost engines, especially the Hybrid versions
  • Good fuel economy and CO2 emissions

Cons

  • Some rivals are better value
  • Decent but not class-leading practicality
  • Important safety kit not standard
9

Seat Ibiza

What Car? Target Price from

£14,404

RRP from £16,905 to £22,155

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Model 1.0 TSI 95 SE Technology | CO2 122g/km | P11D price £16,995 | BIK tax rate 2020/21 @20% £917.73, @40% £1835.46

The Ibiza is a cracking all-rounder in the small car class, offering a spacious interior that even a couple of taller passengers won't mind spending time in, plus a peppy 1.0-litre petrol engine and engaging handling that makes it fun to drive. SE Technology trim gets you everything you're likely to need, including an upgraded infotainment system with an 8.0in touchscreen, plus 16in alloy wheels.

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Pros

  • Great to drive
  • Remarkably spacious
  • Strong petrol engines

Cons

  • Interior could be classier
  • Lots of road noise
  • Skoda Fabia is cheaper
8

Peugeot 208

What Car? Target Price from

£16,887

RRP from £17,860 to £34,275

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Model Puretech 100 Allure | CO2 119g/km | P11D price £19,095 | BIK tax rate 2020/21 @20% £992.94, @40% £1985.88

Not only will the latest Peugeot 208 help you to stand out in the office car park, but it's also very comfortable and is able to soak up lumps and bumps in the road far better than rivals that cost a lot more. The Puretech 100 petrol engine we recommend here pulls strongly from low down in the rev range, while Allure trim brings luxuries such as dual-zone climate control, privacy glass and a 3D-style digital instrument panel that can put a wealth of information right in front of you.

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Pros

  • Very comfortable for a small car
  • Smart and high-quality interior
  • Punchy and frugal 1.2 Puretech 100 petrol engine

Cons

  • Quite an expensive cash buy
  • So-so infotainment system
  • Not much fun to drive
7

Renault Zoe

What Car? Target Price from

£30,095

RRP from £30,095 to £34,595

Model R110 Iconic | CO2 31g/km | P11D price £31,440 | BIK tax rate 2020/21 @20% £0, @40% £0

If you're looking for value from a small electric car, the Renault Zoe is what you should go for. It's one of the cheapest electric cars to buy outright and, being electric, it will cost you nothing in terms of company car tax. But the Zoe is also highly recommendable for other reasons: it has a good official range of up to 239 miles between charges, and it's practical enough for family trips. You can add crucial safety tech such as automatic emergency braking to our recommended Iconic trim for very little extra, too.

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Pros

  • Longer range than similar-priced alternatives
  • Smart interior – particularly on the posher trim levels
  • R135 has punchy acceleration

Cons

  • Rear head room could be better
  • Driving position is flawed
  • Automatic emergency braking unavailable on entry-level trim
6

Volkswagen Polo

What Car? Target Price from

£16,284

RRP from £17,400 to £25,520

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Model 1.0 TSI 95 Match | CO2 120g/km | P11D price £17,740 | BIK tax rate 2020/21 @20% £957.96, @40% £1915.92

One of the great things about the Volkswagen Polo is that in many ways it feels just like a smaller Golf – and by that, we mean it has the kind of premium finish and grown-up driving style that you might expect from a larger and more expensive car. Our recommended 1.0-litre petrol engine really shines around town but can also sit comfortably at motorway speeds, while entry-level Match trim gets you kit such as air conditioning, alloy wheels and lights that come on automatically when it gets dark.

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Pros

  • Comfortable ride
  • Generous interior space
  • Quiet on the move

Cons

  • Ford Fiesta is more fun to drive
  • Gutless entry-level petrol
  • Standard safety kit could be better
5

Peugeot e-208

Model 100kW Allure Premium | CO2 0g/km | P11D price £30,970 | BIK tax rate 2020/21 @20% £0, @40% £0

No, you're not seeing double. While this version of the 208 shares many of its attributes with the petrol-engined model we recommended earlier on, this one runs on electricity, hence the 'e' in front of its name. Not only does it has an impressive official range of up to 217 miles between charges, but it will also cost you nothing at all in company car tax. And just like the regular 208, it's decent to drive and comes with a pleasing amount of kit.

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Pros

  • Eye-catching, classy-feeling interior
  • Decent to drive
  • Well equipped

Cons

  • The Renault Zoe can cover more miles between charges
  • Mushy brake pedal
  • Not the cheapest
4

Toyota Yaris

What Car? Target Price from

£18,537

RRP from £19,915 to £24,010

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Model 1.5 VVT-i Hybrid Icon | CO2 92g/km | P11D price £19,370 | BIK tax rate 2020/21 @20% £828.66, @40% £1657.32

If you're looking to cut costs but don't fancy plugging a fully electric car in every night to charge it up, going for a hybrid can be the next best thing. This Toyota Yaris can run for short distances without using any petrol, but even when its 1.5-litre engine is taking the strain, it remains very efficient. In fact, it's the most frugal car we've ever put through our True MPG real-world test, returning a combined figure of 59.9mpg.

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Pros

  • Excellent real-world fuel economy
  • Toyota's reliability record
  • Slow predicted depreciation

Cons

  • Below-par infotainment system
  • Firm ride – especially on models with 17in alloys
  • Cramped in the back
3

Fiat 500

What Car? Target Price from

£12,874

RRP from £13,275 to £29,995

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Model 42kWh Icon | CO2 0g/km | P11D price £27,940 | BIK tax rate 2020/21 @20% £0, @40% £0

If you live in the city and want something small and funky to get you to work, you can do no better than the latest Fiat 500. While this latest version keeps the retro-inspired styling that helped the previous 500 to sell in huge numbers, it's also gone electric, being powered by a single electric motor instead of a petrol engine. It has a decent range of close to 200 miles, is short enough that even the smallest parking spaces won't be off limits, and has ultra-light steering that makes manoeuvring around tight city streets a breeze.

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Pros

  • Decent range between charges
  • Fun to drive around town
  • Stacks up well financially

Cons

  • Tiny rear seats
  • Noisy on the motorway
  • Rivals can go even farther on a charge
2

Dacia Sandero

What Car? Target Price from

£7,995

RRP from £7,995 to £12,795

Model 0.9 TCe Comfort | CO2 120g/km | P11D price £11,365 | BIK tax rate 2020/21 @20% £613.71, @40% £1227.42

No list of great small cars can be complete without the latest Dacia Sandero; after all, it's such great value that we named it as our Car of the Year for 2021. But it's not just a tempting price that helps the Sandero to score well here. It's also decent to drive, has an interior that is both roomy and comfortable and, in our recommended Comfort trim, comes loaded with kit, including keyless entry, parking sensors and a reversing camera.

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Pros

  • Amazingly good value
  • Lots of space for passengers and luggage
  • Comfortable ride

Cons

  • Poor safety rating compared with rivals
  • Entry-level trim is very basic
  • There are quieter small cars
1

Honda Jazz

What Car? Target Price from

£17,547

RRP from £19,045 to £23,445

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Model 1.5 i-MMD Hybrid SR | CO2 102g/km | P11D price £20,385 | BIK tax rate 2020/21 @20% £937.71, @40% £1875.42

Don't go thinking that just because you drive a small car, you can't fit a lot of stuff inside it. In fact, the Honda Jazz is one of the roomiest cars in this class, with loads of head and leg room for rear passengers and clever seats that can be folded up so that you can carry even more luggage or shopping when you've already filled its big boot. Add in a hybrid engine that performs strongly, excellent fuel economy and a plethora of standard kit and the Jazz is the best small car for company car drivers.

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Pros

  • Very spacious with great seating flexibility
  • Lots of standard equipment
  • Slow depreciation

Cons

  • Pricey by small car standards
  • Not the quietest cruiser
  • Disappointing infotainment system
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