BMW has long been one of the aspirational brands for young image conscious buyers. Almost a default choice for company car buyers, even at the expense of better-equipped or performing cars, BMW enjoys a rare position that almost guarantees the success of any product it makes. So here we have the ultimate test: a family hatch priced at almost £20k, a new contender for the junior executive crown. Does this mean that the 1-series is a hollow, cynical marketing exercise or is it worth that premium hatch price?

Straight off BMW plays a dynamic trump card by making the car rear drive. At the end of the day it isn't a surprise, as BMW wouldn't get away with claiming that the ultimate driving machine is front wheel drive, indeed if front drive had been selected, established manufacturers, with proven expertise in that area may have laid claim to the crown. In the end the price of the layout is a compromise in terms of interior space and a little boot space. A price worth paying?

Dynamically, undoubtedly; the 1-series chassis offers levels of precision, adjustability and traction front drive rivals cannot hope to match. Try to stay with a hard driven 1-series in an Audi A3 and the white flag would be waved after two corners. The steering is well weighted and feelsome and combines with a chassis of rare ability to allow the driver to pick his exact choice of line on any given road. The excellent damping and body control then do their bit to ensure the One isn't thrown off line by mid corner bumps and ridges. The ride is stiff, but not excessively so with the run flat tyres probably being as much of a culprit as the suspension itself.

Levels of grip are high but that doesn't mean you can't play. Turn off the DTC and DSC electronic nannies and enjoy. Push hard to explore the limits and the car will respond. Turn in is sharp in all but the most extreme of conditions, where limits are reached initially the car will issue a warning bout of minor understeer. In a front drive car for many this onset of understeer is game over. Here rear drive pays; play with the throttle and get the front end hooked up again and then get back on the power. Now feel the back end push you through the apex and exit the corner with a whiff of oversteer. In the dry there isn't enough power to unstick the rear at will without erratic steering and throttle inputs, but in the wet it was real fun - 150bhp has never been so much fun in a family hatch.

The 120i we drove has a 2-litre four-cylinder powerplant with all of BMW's latest technologies: Valvetronic, Vanos and latest material and construction methods. It's smooth and refined, although tuned for torque rather than outright power. It is a typical BMW engine though; great to use and hooked up to a very good six-speed manual 'box that is quick, accurate and has well chosen ratios. Our car did have a slightly notchy third gear but I'll give it the benefit of the doubt as an exception rather than the rule given the extremely hard life these press cars tend to live.

So the driving experience is top drawer, but at what cost? Well interior space in the One isn't as generous as a new Golf, Vauxhall Astra or Ford Focus. If you carry passengers or have kids you'd need to have a look for yourself as to whether this is an issue. It will be for some, but this will be down to needs and preferences of the individual. The interior itself is well fitted and equipped, the optional sports seats are excellent and you sit low in the car. It feels sporty before you press the engine start button. The infamous I-drive makes an appearance and is its usual baffling self after a period of unfamiliarity. I don't mind I-drive, the optional navigation system in particular is great, but some hate it.

Speaking of love-hate, take a look at the pictures. Some will be saying "oh dear", others "oh wow". From some angles we think that the new One looks well, from others not. The long bonnet and stubby tail are distinctive; the heavily sculpted sides are becoming more familiar now. It is another Bangle design special, dividing opinion like only Bangle's cars have of late, which is in itself a good thing I suppose. Also in common with Bangle designs that we've seen before you need to pick exterior colours and alloys with care. Not all colours look good; our test car's silver is a fairly safe bet and big rims will always help.

So for me the 120i goes straight to the top of the premium hatch class, the price ticket looks harsh in isolation. Compare the performance to a RenaultSport Megane and you wonder what sort of value for money you are getting but compared to a Mercedes-Benz C-class or Audi A3 it is, quite literally, bang on the money. Buyers looking for more performance can look to the 120d; real performance junkies will have to wait for the 130i. Having driven the 630i with which it shares its engine I can tell you that it will be one of the great driver's cars released this year.

As it stands, the 120i is a terrific car, the default choice as the best driving experience available in the premium hatch sector. The trade off in terms of interior space will be acceptable to many of the potential buyers. As a first rung on the ladder of BMW ownership the 1-series is a rip roaring success and that for many will be enough to make the price worth paying, including those controversial looks.