IT'S been one of Europe's top-selling cars for more than 30 years now ... and sales just keep pouring in for Fiat's little Panda.

Now in its third generation, this appealing five-door compact SUV keeps breaking existing sales records, simply because it's now larger and roomier, safer and more economical than ever before.

It handles and performs like a far larger saloon, while its range of miniscule engines punch far above their weight.

The 1.2-litre 69bhp version comes with a top speed of 102mph while its official combine fuel-consumption figure is quoted at 55.4mpg. The 1.3 MultiJet diesel sprints up to 104mph while returning 72.4mpg on the combined cycle.

However, the big favourite is the 0.9 TwinAir turbo 85bhp engine which redlines at 110mph and boasts a combined cycle fuel return of 68.9mpg when fitted with a Dualogic semi-automatic gearbox as opposed to the standard five-speed manual.

Not only that, but the beauty of this TwinAir unit is that it returns a CO2 figure of 95g/km, meaning it's green as well as being lean and doesn't cost a penny to tax.

Sitting just 3653mm long and 1,643mm wide - far less than a Ford Fiesta - Fiat's design team have done wonders to create a five-seater (at a push) and still find space for 870 litres of luggage.

Yet while the Panda is definitely a town car, it comes with big-car appeal, with handling and performance similar to a medium-sized hatchback.

As one of the best-loved small cars on the market, the third-generation Panda comes with superb quality and great driving capabilities.

The original 1983 Panda was the first car in its segment to offer four-wheel-drive and it proved so bullet-proof, that there are still a few first-generation models kicking around today.

So for those looking for a second-hand Panda, you won't go far wrong if you can find a nice 4x4 example, for when it comes to the added safety offered in inclement weather conditions, then the extra premium in its forecourt price is really a small price to pay over its front-wheel-drive siblings.

The TwinAir version allows you to take it to the extreme because its 875cc engine has only two cylinders. But don't be fooled into thinking this means you will be lagging behind the rest of the traffic, because the TwinAir packs a mighty punch - thanks to its turbo - while at the same time allowing you to thumb your nose up at George Osborne.

The winner of the International Engine of the Year 2011 the TwinAir is also used by Fiat in its Punto, a much heavier car, so it makes light work of pulling the Panda.

It's got a great sound too with a throaty rasp as you put your foot down hard, but it will cruise quietly all day at motorway speeds.

The latest version may look similar to its predecessor but if you look closely you will see that the design has been softened by rounding off the more angular lines to give it more appeal.

Inside too there is more space while its more upright stance and extra height make the Panda an easy car to slip into and exit because the seats are at a sensible height, a feature us older drivers will value.

The dials are bang in front of the driver and are sharp and easy to read, while the high-situated gearlever, which sits at the base of the dashboard, falls easily to hand.

The lack of cylinders means you have to use the gearbox a little more than a four-cylinder engined car, so the gear stick positioning is ideal.

Other changes on the Panda include an all-new suspension and a much more rigid body. The end result is a car which not only handles beautifully, but is quiet inside.

Space, safety, high specification, economical running costs and great driving ability are what you get with the little Panda and with all-wheel-drive versions finding their way back into showrooms as personal finance plans made by original owners come to an end, there are some great one-owner Pandas lurking in dealer forecourts.

A 2012 0.9-litre TwinAir 84bhp Lounge trim on a 12-plate will cost between £3,720 and £4,975, depending on condition and mileage, while a similar aged 1.3-litre MultiJet diesel will be a bit more expensive at between £4,685 and £6,230.

A 2013 13-plate TwinAir will have a price tag between £4,480 and £5,755 while the diesel option will cost between £5,580 and £7,150.

More versatile all-weather, 4x4 models will come with a premium of between £1,000 and £2,000 over the above prices.