Simon is looking to replace his 2005 Volkswagen Passat. He's started commuting to work by bike since he bought the VW, so his first priority is to downsize to a smaller, more economical car. His second priority is dialling up some driving entertainment when he does actually get behind the wheel, so he's thinking some kind of near-new light hot hatch might be the ticket. He's willing to consider anything as long as it has a manual transmission.

The budget

$20,000

The shortlist

Surprisingly perhaps, given we are looking at performance cars, Simon's wish for a manual transmission puts two talented possibilities straight onto the chopping block.

Renault's Clio RS200 can be had with any gearbox you want as long as it's a dual-clutch auto. VW's Polo GTI does offer a manual option but only those that came after a 2015 facelift, and examples of this vintage aren't quite on at this budget.

Other contenders miss the boat for different reasons. Alfa Romeo's Mito QV is charming but doesn't quite stack up in the context of what else is available. The Mini Cooper S in this price range tends to be pre-2010 stock, which is probably stretching the definition of 'near-new' as we tumble into 2017.

2010-on Citroen DS3 DSport, from $8700*

This Citroen's 1.6-litre turbo engine is underpowered in this company (115kW, 121kW for MY15-on models) and its suspension tune isn't quite so single-minded.

A tight back seat, mediocre small-item storage and the odd bit of confounding switchgear mean its cabin doesn't quite tick every practical box, either.

But the DSport gets along with unmistakeable enthusiasm and gets through the bends with real flair, too.

It's not as thrilling as its rivals here but it's still good fun. It's nicely presented inside and out, and has a unique cabrio option.

It's thrifty (6.0L/100km, 5.6L/100km for MY15-on models), has a decent boot and its ride treads a more equitable balance between comfort and control than its rivals here.

Get one sold after March 1, 2014 – which is possible in this budget range – and you can tap into a comprehensive six-year warranty/capped-price servicing combo.

Read Drive's Citroen DS3 reviews:

Used-car review: Citroen DS3
First drive: 2015 Citroen DS3

2013-on Ford Fiesta ST, from $14,900*

This Ford doesn't have the 'special' feel of the DS3. It looks like the hopped-up budget hatch that it obviously is and the cabin can feel a bit cheap in places.

Its ride doesn't soak up bad roads that well, it has par-for-the-course warranty prospects (three years) and it's no benchmark for back-seat or boot space.

But the ST's 1.6-litre turbo engine is properly punchy, cranking out up to 147kW thanks to an overboost function, and its handling is soul-gratifyingly incisive and poised.

It's a real hoot to drive yet it's quite economical (6.2L/100km), usefully practical and falls under Ford's lifetime capped-price servicing regime.

Its sharp new-car value translates straight to the used-car lot – a 2015 model with less than 10,000km on the clock is possible for this kind of money.

Read Drive's Ford Fiesta reviews:

Road test: Ford Fiesta ST
Road-test comparison: Light hot hatches

2013-on Peugeot 208 GTi, from $15,300*

This Peugeot gives the Ford a run for its money for sheer grunt with its 147kW 1.6-litre turbo engine and has the agility and poise to deliver big grins through the bends as well.

It has this group's best economy rating (5.9L/100km) and most contemporary, highest quality cabin vibe, and its space and practical credentials are solid for this size of car.

But the GTi's steering, gearshift and other touch points lack the ultimate finesse that makes the Fiesta so rewarding to drive, and its ride can be similarly testing.

It has no answer to the Citroen's long warranty (its runs to three years) or the Ford's lifetime capped-price servicing deal (its runs to five years).

Read Drive's Peugeot 208 reviews:

Used-car review: Peugeot 208 GTi
Road-test comparison: Light hot hatches

Drive recommends

If Simon needed an everyday commuter the Citroen might just win this shootout but in his limited-use, take-the-fun-and-run scenario the more hard-core Ford and Peugeot just seem more appropriate.

The 208 GTi wins the static-showroom test. It feels more contemporary and special, particularly inside. And it doesn't under-deliver out on the open road, either.

The Fiesta ST, though, is more invigorating, more rewarding, more fun. That fundamental asset, allied to its stronger hip-pocket/servicing credentials, makes it the light hot hatch of choice for the pleasure seeker on a restrained budget.

* Values are estimates provided by Redbook based on an example averaging up to 20,000km per annum and in a well-maintained condition relevant to its age.