Dinky car revolution: Why more drivers are swapping their gas guzzlers for cute compacts

There's a terrible secret that the car-makers don't really want you to know about, or at least properly appreciate. You don't need a big car. Not just in the sense that you don't actually need four-wheel drive to nip down to Sainsbury's (as Alexei Sayle pointed out some many years ago), or that you don't need a V12 twin turbo-charged piece of Italian lunacy to nip up the M6 to see your mum (especially given that you shouldn't really be doing more than 70). Or even that you don't need seating for seven in your mega-people carrier when you have a family of four. No: You don't need a big car – and you shouldn't even desire one – because small cars are so fantastically good these days, as well as greener, cheaper to run and easier to park in clogged up streets. The scrappage scheme, the still stratospheric cost of fuel – all contribute to the small car revolution. Perhaps more of us are being persuaded, by attractive design and harder economic times, that, no, we don't need such a large set of wheels as maybe we'd assumed.

At a time when the car industry has had its tyres slashed by the recession, city car sales are powering ahead, double where they were last year and three times their level in the last gasps of the boom, in 2007, while sports car sand SUVs are slumping. Smaller cars dominate the sales charts as never before. Suddenly the Hyundai i10 is the best-selling car in the UK to private buyers, a parking space once reserved for bigger Fords and Vauxhalls. The scrappage scheme has been responsible for some of that buyer enthusiasm for smaller, cheaper models. A discount of £2,000 on the £236,400 list price of a Bentley Brooklands obviously doesn't provide much additional incentive for you to acquire that admittedly impressive personal transport. But £2,000 off the £7,200 cost of a Hyundai i10 or a £6,495 Kia Picanto makes for a more tempting proposition. As you say goodbye to your creaky old motor you are welcomed to a world of manufacturers' warranty and effortless assured reliability. Indeed, in the slightly bizarre event that you traded in a 1980s vintage Rolls-Royce Silver Spur for a Renault Clio you would miss little in the way of creature comforts or much performance, though you'd miss the Flying Lady guiding you down the highway.

Even if you don't take much interest in cars, you cannot have failed to notice the new trendy gorgeous little cars that have been appearing on our roads. We've had the cute little Smart car for a decade now, and the revamped retro Mini for almost as long. But now they've been joined by some notable others – Fiat's reborn 500, the Toyota iQ, Alfa Romeo MiTo as well as a still-fresh looking trio of cars that are basically the same ultra-capable city car underneath – the Citroen C1/Peugeot 107 and Toyota Aygo. Even the G-Wiz, a gawky-looking electric car, is at least a triumph of sorts, a practical green car you can use today.

Back in the real world, new generation models of hatchbacks' such as the Vauxhall Corsa, Ford Fiesta, Honda Jazz and Volkswagen Polo are offering levels of safety and comfort that were the preserve of limos only a couple of decades ago – and with vastly more reliability and resistance to rust. Even carphobes have to admit that these are remarkable feats of design and engineering. You no longer have to rough it in a smaller car, or risk life and limb. You can plug your iPod in and hear the music even when your little car is maxing it. Electric windows are taken for granted now, as are air conditioning and the use of higher quality, more tasteful materials to furnish your cocoon. Even the cheapest small cars on the market come with anti-lock brakes, and most with some level of sophisticated electronic stability control governed by an underbonnet computer with the sort of processing power that was once reserved for Apollo space programmes. Tick the options list and cruise control, rear parking camera, sat nav and much else can all be fitted to your small but perfectly formed package.

But today's small cars don't give that much away to their bigger brethren either. When BMW set out to reinvent the Mini in 2000 they did more than skilfully to reinterpret the famous little car's "design cues". In the old Morris factory at Cowley, renamed BMW Oxford plant, they systematically went about ensuring that their new small car would be built to the same standards as a BMW 7-series saloon, and not suffer from the old bugbears of its much loved predecessor – "Fred Flintsone" rusted out floors, flaky door bottoms and a mud-trap rear subframe that had a life of but a few years. Even the oldest "new Minis" haven't yet started to corrode much. And the average Lexus driver will recognise in another Toyota group product, the iQ, much of the care and quality they are used to in their ultra-solid saloons. Slightly higher up the price bracket, the Mercedes-Benz A-Class and the BMW 1-series try to pull off the same trick. They're too big really to be called city cars, but they also demonstrate the general trend towards downsizing that has attracted even the most prestigious makes.

Indeed, if you really want the ultimate in tasteful surroundings in a dinky package, you may not have to wait that long for Aston Martin's take on the idea – the Cygnet, a reworked Toyota iQ with a hand-crafted interior and an Aston trademark grille (a few Minis were coach-built like that in 1960s and 1970s by the likes of Wood and Pickett for Peter Sellers and John Lennon, a sign of things to come perhaps). Aston Martin know that their customers are usually wealthy enough to own more than one car, and often have a smaller model to tootle around town in. They also know that they need to protect their brand's "equity", so even if you have the requisite £20,000, you can only have one if you already own a "proper" Aston or you order a DB9 or a Vantage. Indeed you could buy one of each, like a set of Louis Vuitton luggage.

Today's small cars are of course usually much bigger and heavier than their forbears, which upsets purists. The new Toyota iQ is, interestingly, exactly the same length as the original Mini designed by Sir Alec Issigonis in 1959. Yet the iQ has less room inside for people and their bits and bobs, and is realistically best thought of as a three-seater. The iQ is also wider than the Mini, perhaps because we're broader then we used to be, but also to aid the car's handling. Both the Fiat 500 and Austin Mini were a fraction of the weight of their modern descendants, and were even grater miracles of packaging – room for four adults at a pinch plus some luggage. But we demand much more safety and convenience today – airbags, crumple zones, air conditioning, bigger, plusher seats, – so the old way of making small cars, a truly minimalist philosophy, has had to be compromised. Even if you wanted to reintroduce the 1959 Mini today you couldn't, because it would comprehensively fail all the crash and pollution tests.

But still, the downsizing trend is clear enough to see. There are other signs of it. Where once 4x4s were all lumbering vast machines, today there is a bewildering range of much smaller vehicles that are almost as good at clambering up mountains (though they are of course rarely called upon to do so). They're classified as crossovers or hybrids, combining elements of the hatchback and the traditional SUV. They have names like Toyota Urban Cruiser, Nissan Qashqai, Kia Soul and Skoda Yeti and, in a few months, Mini Crossover, perhaps the ultimate sign of how even those who want a SUV are bowing to economic and societal pressure to drive something more socially and environmentally acceptable. It's worth mentioning that they'll probably do everything that the car that started the recreational SUV trend, the 1970 Range Rover, was capable of, and, in real terms, for a fraction of the cost.

So the lesson of the great small-car revolution is that we have come a very long way in a very short time. Much of progress that has been made in making small cars so usable and, frankly, respectable a choice of wheels is down to government and EU action – mandatory safety and emission standards, for example. But much else is down to the astonishing ingenuity of the world's car designers and engineers. Despite the speed cameras, congestion charges and extortionate cost of fuel, the motorist has never had it so good when it comes to their choice of wheels. He, or she, is having it large – and small.

Small cars, big successes...

Shortest

Smart ForTwo

Smallest convertible

Daihatsu Copen

Most fashionable

Fiat 500

Best sellers

Hyundai i10, Vauxhall Agila, Ford Fiesta

Made in Britain

Mini, Nissan Micra, Honda Jazz

Most expensive

Aston Martin Cygnet

Newest

Nissan Pixo, Suzuki Alto

Sportiest

Alfa Romeo Mito

Not on sale here

Tata Nano, Daihatsu Basket,

Going too far

The Peel P50, Bond Bug