Two summers ago I spent a very enjoyable week behind the wheel of what was then the most basic Ibiza you could buy, the 1.2 Reference. Not exactly the liveliest or most exciting thing I've ever driven, it was still a lot of fun in the kind of way that only an underpowered, sparsely-equipped car can be. After all, sometimes the simplest pleasures are the best.The 1.2 Reference is now a thing of the past, and with the introduction of the new Ibiza the 1.2 S tested here takes its place as the entry-level model in the range. The S trim level is the only one available with the Volkswagen Group's little 1198cc three-cylinder petrol engine, and vice versa - the 1.4 petrol car comes in both SE and Sport trim, while the 1.6 is offered in Sport form only.I must admit that I quite like basic cars, so I don't mind the fact that the S comes with steel wheels (all other versions get alloys), and misses out on cruise control, front foglights, electric rear windows and so on. I could, however, have done with electric door mirrors, though the reason for my slight tetchiness on the matter is simply that the test car's manual adjustment didn't have enough range for my purposes.(Actually, the test car wasn't as basic as all that, since it was fitted with air-conditioning which is not part of the standard specification. According to SEAT, this one change turns the car from an S into a separate model called S/AC, costing £9495 rather than the £8995 of the "real" S.)What I really like about the car is its engine. There seems to be a division of opinion on this among my colleagues; some don't like it at all, while others rave about it, and among the latter group there are several who describe it as "characterful". To be honest, I'm not sure what this means, but it may be a one-word attempt to convey the engine's pleasantly growly note and its willingness to spin round as fast as the revlimiter will let it without any apparent sign of strain.Unless you're going to spend all your time driving round town (and we'll come to the Ibiza's prowess in these conditions shortly) you'll probably find yourself working the engine quite hard. There's just 69bhp on tap, so you often have to use full throttle when going uphill just to stop yourself slipping back down again, and overtaking manoeuvres require much forward planning and a strong faith that God is on your side.On the other hand, you can drive the car absolutely flat chat without worrying that you're going too fast to be safe. This is very jolly, and it's due to the Ibiza's soft but well-damped suspension and the excellent handling that results from it. The old Ibiza was good in this respect, but the new one is better, not least because the front-end bounce that Ibizas suffered from for more than a decade has now been eradicated. The ride quality is also noticeably better than before.I've tested many cars which became interesting only when you started driving them hard, which seems a bit pointless when they were clearly designed to offer little more than simple family transport. Fortunately, the Ibiza doesn't fall into this category.It's very good in town too, with major controls that are light but precise (the steering is especially impressive). Nobody, not even the most inexperienced of learners who has never held a steering wheel in their hands before, could possibly find the Ibiza difficult to drive.Not when they're going forwards, anyway. Reversing is a different matter, simply because there isn't enough glass area in the rear of the car. Visibility is just not good enough, and this is going to lead to some unfortunate scrapes - or worse - during parking manoeuvres. The pity of it is that the previous Ibiza, with its design which had become old-fashioned well before the present model took over, was so much better.But not in many other ways. The new car is roomier, not so much for passengers (the rear is a bit of a squeeze if you have to sit behind large adults) but certainly in terms of luggage space, which has increased from 267 litres to 292 litres with the back seat in place.According to Euro NCAP, the new Ibiza is also a lot safer than the old one. It was awarded the maximum five stars for adult occupant protection, and its combined scores in this and other categories are as good as you'll find with any other small hatchback.Running costs are likely to be reasonable. You probably won't match the official combined fuel economy figures of 47.9mpg, because the 1.2 S will take forever to reach its destination if you try, but at the same time you'd have to be driving it very hard indeed to fall below 40mpg.CO2 emissions of 139g/km mean you'll be paying £120 a year to tax the car until April 2010, at which point VED payments inch up to £125; the diesel versions which will join the range in the next few months will do better than this, but they will also be significantly more expensive to buy in the first place.And to be perfectly straight with you, even though I haven't driven a new Ibiza diesel yet - because there aren't any - I don't think I would like it better than the 1.2. I don't really see the need for the more powerful petrol versions either; as before, the cheapest, slowest and most sparsely-equipped Ibiza is also the one I would most like to keep. Engine 1198 cc, 3 cylinders Power 70 bhp @5400 rpm Torque 83 ib/ft @3000 rpm Transmission 5 speed manual Fuel/CO2 47.9 mpg / 139 g/km Acceleration 0-62mph: 15sec Top speed 101 mph Price From £10086.00 approx Release date 21/07/2008