The Fiat 500 is now only available in two flavours: Full electric or, as reviewed here, the slightly misleadingly named Hybrid.

I say misleading because this particular hybrid pairs a tiny battery and motor with a 1.0-litre three-cylinder petrol engine. You can’t plug it in and charge it up and neither can you drive the car using electric power alone.

The electrical portion of the powertrain is there simply to provide assistance to the engine so, for example, if you engage the clutch while coasting to a halt the stop-start system will cut the engine before you come to a standstill and, therefore, improving economy.

It doesn’t, though, provide any additional thrust so 69bhp is all you’ve got to play and, while it’s perky enough to deal with city traffic, anything that requires a significant change of pace will leave it floundering and you disappointed.

There’s no doubt that the soft suspension is geared towards comfort but, while the little Fiat does smooth out most humps and bumps, it struggles to settle properly on its dampers. There’s also a question mark over its ability to handle potholes are other large imperfections which can send a shudder through the car’s structure.

The soft set-up does impact on the handling. The body leans significantly when you try and carry any speed through corners and the steering remains light and uncommunicative, meaning that you have no idea what’s happening beneath the front wheels.

The 500 is a city car and that’s where it feels at home. In urban areas with congested streets and limited parking the car’s compact dimensions and light steering – there’s a ‘city’ button to increase the assistance further if you feel you need it – make it a boon for threading your way through tight spaces.

The gear lever is mounted high on the dashboard making it easy to reach but the shift action is a little notchy and the clutch pedal a little vague so it requires considerable focus to drive smoothly in stop-start traffic.

Once again it’s in the city where refinement is at its best. If you’re just gently pootling around town the passenger is a reasonably peaceful place to be but if you put your foot down you’ll quickly become aware of familiar three-cylinder thrum as it permeates the cabin. Personally, it’s not a sound that I find particularly irksome. Quite the opposite, in fact, but for some it might prove less than welcome.

As the pace (slowly) picks up so does the level of wind and road noise although, it has to be said, it never becomes irritatingly loud.

It’s not easy to get comfortable behind the wheel. You are, in fact, likely to find yourself having to adapt to the seating position rather than adapting the seating position to suit your preferences. I did feel that I was perched on, rather than sitting on, a driver’s seat that lacks proper height adjustment and, instead, has a lever that simply changes the angle of the base.

Getting comfortable is complicated by the fact that the steering only adjusts for rake, not reach, and that meant that I couldn’t avoid my thighs occasionally coming into contact with the base of the rim. The footwell is a bit cramped, too, and there’s nowhere to rest your left peg between gear changes.

There’s plenty of headroom, though, even with the panoramic roof fitted.

Storage-wise there’s a tiny glovebox and even tinier door bins at your disposal. The cupholders are, at least, big enough to hold a decent cup of Italian coffee.

With just three doors getting into the back of the 500 is a bit of an adventure. There’s just the two rear seats, a good decision in my opinion, so you get a decent amount of shoulder room but passengers will probably rue the lack of room for their heads and legs.

The rear seats fold in a 50/50 split on all models except for Pop trim where they fold flat in a 100/0 configuration. Yes, I did just make that up. There’s a release button on the top of the backrest. Press it and push the seatback forward. Simple.

The boot, with the rear seats in place, will hold 185 litres of your stuff. That’s big enough for a few bags of shopping. Stow the rear seats away and you get a considerably larger space but not a completely flat floor.

The good news is – and regular readers will know how happy this makes me – there are physical controls for the air con functions. They’re nice, chunky buttons that are easy to operate when you’re on the move.

Rear parking sensors are standard across the range and that’s just as well because the view out of the back is quite severely compromised. Thick A-pillars mean that visibility out of the front isn’t as good as it could be and it can make pulling out at junctions a fraught affair.

Pop trim – that’s the entry-level model – is fitted with a basic stereo that is little more than a small screen flanked by a few buttons. To say it looks dated is a mild understatement. You do, however, get DAB radio, USB socket and a multi-function steering wheel.

Lounge trim, and above, is equipped with a seven-inch touchscreen with Bluetooth and Android Auto and Apple CarPlay smartphone mirroring. The screen sits high on the dashboard so you don’t have to divert your gaze too far away from the road to see it. It’s fairly straightforward to use but does have a tendency to catch the glare of the sun – particularly if you’ve opted for the panoramic roof – and can be difficult to read on bright days.

The inside is as stylish as the outside. The materials and colour choices give the 500 an air of retro chic. There’s a body-coloured insert that runs the width of the dash and adds even more visual interest to the cabin as a whole. It’s a bright, fun, welcoming environment that should help lift the mood of its occupants.

There are no soft, squishy plastics though and build quality doesn’t stand comparison with some of its rivals but it certainly doesn’t feel cheap or poorly assembled.

The 500 is a car that will win over your heart, rather than your head. The driving position isn’t great and the ride is fidgety. Some people – I’m not one of them – might find the engine a little intrusive when it’s stressed. However, it’s a doddle to drive around urban areas, there are plenty of customisation options and it’s cute, retro looks will certainly tug at your heart strings.

Fiat 500 Lounge 1.0 Hybrid 70HP

Price: £14,750

As tested: £16,350

Engine: 1.0-litre 3-cylinder petrol

Transmission: Manual

Max power: 70hp

Max torque: 90Nm @ 3,500rpm

Max speed: 104mph

0-62mph: 13.8sec

Combined mpg (WLTP): 53.3

CO2 emissions (g/km): 119

For more information visit www.fiat.co.uk