What we were looking for
This is a small yet highly competitive category. Quality, refinement and driver appeal are crucial, but our winner must have the right image and be affordable to run.
BMW 320d ES
List price 24,910
Target Price 23,280
This is the third year running that the BMW 320d has won this award. Surely its position has weakened over time? No - the opposite is true.
As well as seeing off two new rivals this year, the 320d has gained technology that makes it even stronger.
Let's start with what's new. Every 3 Series now features Efficient Dynamics. Put simply, it's a range of technology that cuts CO2 emissions and improves fuel economy. It includes aerodynamic tweaks, direct-fuel-injection engines, new tyres and a system that feeds power back to the car under braking.
Plus, on the four-cylinder models like the 320d, the engine automatically switches on and off as needed in traffic, so you're not using fuel unnecessarily.
Sounds too good to be true? Far from it, actually. The stop/start system works seamlessly and average economy has jumped up from 49.6 to 58.9mpg. CO2 emissions have dropped from 153 to 128g/km, which is as good for the environment as it is for your bank balance - the 320d drops two categories for company car tax. That's the icing on top of an already appealing cake.
Crucially, though, every journey in the 320d is a pleasure. Perfectly weighted controls, exceptional poise and pin-sharp steering take the strain out of driving but still lets you enjoy it. Yes, the ride is firm, but the BMW's composure is ample compensation.
If you cover a lot of miles - as drivers of these cars are likely to do - you'll appreciate the 3 Series' outstanding refinement. The cabin is quiet at all times, while the revised engine is smoother than ever.
At the same time, power is up from 161 to 175bhp. Considering that it was already an impressively strong engine, it's enough to say that you're not going to be left wanting for pace.
None of this would be enough if BMW didn't provide the quality that buyers expect. No worries there: the cabin feels like it's been carved from stone, while the precise switches and classy materials back up the impression that it's a premium product.
There's also plenty of space for four tall adults, a large boot and a perfect driving position.
Quibbles? Rear headroom could be better and the boot is an awkward shape - but neither are big enough to put the 3 Series' position at risk just yet.
BMW 318i ES
List price 21,035
Target Price 19,666
Mercedes C320 CDI Elegance
List price 31,612
Target Price 29,688