Fiat's award-winning 500 city car starts at an on-the-road price of less than £8,000 again – thanks to the Chancellor's recent cut in the VAT rate.

The 500 range stunned customers and industry commentators alike when it was launched with an entry-level price of just £7,900 for the 1.2-litre Pop in January. The list price rose to £8,100 in the summer. However the new VAT tariff of 15 per cent means that the price has dropped again, to £7,929.

All the other cars in Fiat's range have also benefitted from the 2.5 percentage point cut in VAT. For example, the Panda range now starts at just £6,859 for the 1.1 Active, the Grande Punto range opens at £9,056 for the 1.4 Active, while the Multipla people carrier now begins at £13,751 for the 1.6 16v Dynamic Family.

"It has been praised for its style, eco-friendliness, road manners and economy," says Elena Bernardelli, marketing director, Fiat UK. "Now the Fiat 500 has re-affirmed its terrific value for money with this latest list price."

Fiat 500