After August, January is the boom time for buying new cars. Gavin Green picks the best of the bunch, whatever your budget
The annual August plate-change may be over, much to the relief of the very people who first requested it (the car industry). January, however, remains a key month for car-buying. After all, the next best thing to a new letter on the plate is a new year on the registration documents. Accordingly, high-street stores shouldn't be the only places with queues of eager buyers lining up after Christmas. The car dealers, who need a bit of New Year cheering up, should also be doing very nicely. But where to spend your money? Here's our guide to the best new cars for the new year.

City cars: Go to the Continent and order one of the new Mercedes-Benz Smart cars (about pounds 7,000), the most cleverly conceived city car ever. UK sales aren't scheduled until 2000, at the earliest. Funky to look at, and a buzz to drive, the new Smart is more than a foot shorter than a Mini, so it's a cinch to park. It is also beautifully built. Mind you, for long motorway dashes or four-up family motoring you'll need something bigger. If you don't fancy shopping abroad, go for a Fiat Seicento (from pounds 6,495) which, unlike the Smart, has back seats.

Fiesta-class superminis: The French have given us a brace of good cars in this class this year - the (Coventry-built) Peugeot 206 (from pounds 8,945), and the new Renault Clio (from pounds 8,350). The Peugeot is roomier and more fun to drive. The only drawback is the poor driving position for big-footed men. Also recommended is the Volkswagen Polo (from pounds 8,290), but avoid the flaccid 1-litre models.

Golf-sized hatchbacks: The new Ford Focus (from pounds 12,850), Europe's Car of the Year, has raised the stakes so high in this sector that rivals must be wondering what to do to catch up. It's superb to drive, economical, roomy and stylish. But a Volkswagen Golf (from pounds 12,250) is better made, and feels a classier car inside.

Mondeo-sized family cars: The Volkswagen Passat (from pounds 15,460) is the pick of the bunch. The best engine options are either the 1.8-litre 20- valve petrol motor, or the superbly economical 1.9-litre turbo-diesel. Also recommended: the new Honda Accord (from pounds 15,295), a car of almost seamless competence, if bland.

Sporty saloons: The BMW 3-series (from pounds 19,745), which was revised this year, is the pick. It is such a superbly rounded car, responsive to drive, beautifully made and so tangibly well engineered. As with all BMWs, go for a six-cylinder model: it is one of the world's finest engines. The graceful Alfa 156 (from pounds 17,971) runs the BMW close but, ultimately, lacks the depth of engineering.

Big cars: The BMW 5-series (from pounds 24,405) is probably the pick, thanks to its build quality, driver appeal and thorough engineering. Stick to the sixes: don't bother about the pricy V8. The new Alfa 166, coming in late January (from pounds 22,500) is also worth a glance. The new Jaguar S-type (from about pounds 28,000) may look a bit retro for some tastes, but the early word is that it drives superbly. It goes on sale in late March.

Luxury cars: The new Mercedes S-class (from pounds 43,640) hits Britain in early March. It is superb, probably the most completely engineered car that has ever been launched. The Jaguar XJ8 (from pounds 35,205) is older and less polished, but more charming, and its V8 engine is supremely refined.

Sports cars: The new Mazda MX-5 (from pounds 15,520) is even better than the old model - superbly practical fold-down hood, great to drive and brilliant value, helped more by its low depreciation. Also recommended: the Lotus Elise (pounds 21,100). The quality is a bit suspect, but the driving experience is unmatched.

Supercars: The Subaru Impreza Turbo four-wheel drive (from pounds 19,715) is the most supremely capable fast car in the world, and the quickest for gobbling up those long and winding back roads. It is also an incredibly easy car to drive. But it does look a bit dull. If you fancy cutting a bit more of a dash, go for the touch more pricy Ferrari 550 Maranello (pounds 149,701).

Estates: The world's best, money-no-object estate car is the Mercedes E-class wagon (from pounds 27,845) - roomy, beautifully wrought and good to drive. If you can't afford almost 30 grand, then a Volkswagen Passat (from pounds 16,410) is very nearly as good.

4x4s: Britain's favourite off-roader, the Land Rover Discovery (from pounds 25,520), has been completely revised, although, with its carry-over styling, you'd never know it. The new Disco is miles better than its roly-poly predecessor. Buy the turbo-diesel: the V8 petrol model's thirst for fuel will very soon bankrupt you. If competent on-road behaviour is what you really, really want, and you think a 4x4 would spice up your life, then get yourself a Mercedes M-class (from pounds 31,780). If that's too big, go for the Land Rover Freelander (from pounds 16,570), cool and sporty.

People carrier: The new Renault Espace (from pounds 19,670) is king, due to fantastic versatility. If five seats are enough, the Renault Megane Scenic (from pounds 12,995) is fine value, practical and good to drive.