The Volvo S40 is difficult to categorise. It was originally designed to battle with the Audi A3 and BMW 1 Series, but its saloon bodystyle pushes it towards the compact executive sector - competing with the BMW 3 Series, Audi A4 and arguably treading on the toes of the bigger and newer Volvo S60. It uses a version of the last generation Ford Focus platform, which is a legacy of the manufacturer’s previous ownership by Ford. But with its smart cabin, unique styling and extensive safety equipment tally it feels every inch a real Volvo.

Given that it shares a platform with the Mk2 Ford Focus, it’s no surprise that the Volvo S40 handles reasonably well. But the steering is vague and overall the chassis isn't as fluid and precise as more modern rivals. Mid-corner bumps upset the composure, the ride isn't particularly well damped and it tends to be unsettled on rough tarmac. The engine range includes a pair of diesel engines - a four-cylinder and a five-cylinder - while petrol choice is limited to a 143bhp 2.0-litre four-cylinder. The distinctive sounding five-pot 148bhp D3 oil burner should be the choice of performance fans.

Volvo was one of the first manufacturers to embrace the idea of low CO2 models. The S40 DRIVe uses the 113bhp four-cylinder D2 diesel and adds stop/start, lowered suspension, eco tyres, plus drag reducing wheels and trim. Available in ES, SE and SE Lux trims, it’s the cleanest Volvo S40 as it emits just 99g/km and has a combined consumption of 74mpg. That’s 15g/km cleaner than the standard D2 model, but the DRIVe demands around a £500 price premium. Even the most powerful D3 model does 55mpg, while the sole petrol motor manages 37mpg with identical performance figures. Volvo offers fixed-priced servicing across the range, while residual predictions vary between 30 and 35 per cent. Avoid the petrol models to steer clear of the heaviest depreciation.

One of the oldest cars in the Volvo line up, despite a refresh in 2008, the Volvo S40 is beginning to look a little dated. The range topping R-Design models get sporty bumpers, plus stiffer suspension and large wheels, while the frugal DRIVe versions get drag reducing sills and a lowered ride height. Across the line up there’s a choice of ES, SE, R-Design and SE Lux models. The minimalist cabin design features the Swedish carmaker’s trademark floating centre console, which continues to feature in the all-new V40 hatchback - a testament to Volvo design. The entry level ES gets matt trim while the more upmarket models are brightened up with aluminium dash inserts.

The new Volvo V40 hatchback has been designed to rival cars like the Volkswagen Golf and BMW 1 Series, leaving the standalone S40 in a bit of a niche. Passenger space is compromised in the back, as there's a marked lack of headroom due to the dipping roofline, plus small rear doors make loading in child seats difficult. Compared to its key saloon rival - the Volkswagen Jetta - the S40’s shorter wheelbase means legroom is much tighter for adults. However, a fold-flat front passenger seat and tumbling rear seat backs give the ageing Volvo's versatility a boost.

Volvo finished in an impressive 10th place in our 2012 Driver Power satisfaction survey, so reliability is clearly a strong point. The S40 didn't feature but the V50 estate on which it is based finished a respectable 43rd. When it comes to safety, the S40 has a five-star Euro NCAP rating and benefits from the firms SIPS Side Impact Prevention System. Curtain airbags, stability control and whiplash reducing front seats are standard across the range and there are full headrests for all five occupants. The BLIS blind spot warning system is on the options list, and in common with all Volvos you get daytime running lights. On SE, SE Lux and R-Design models they are LEDs.