THE S40 and V50 are nice cars, but they have always seemed a bit expensive.

This was especially the case with the D5 version, which offered very good performance but only so many people are going to pay nearly $50,000 for a small diesel wagon or just over $46,000 for a small diesel sedan.

Both cars are more sensibly priced with the new diesel. They still aren’t cheap at $42,950 for the S40 sedan and $45,950 for the V50 wagon, but they are at least both now worth considering.

The new diesel is perfectly suited to both cars. It is not the most potent engine, but will still get you around the suburbs with ease.

It doesn’t have the same super-strong pull of the D5 and the 0-100km/h time of 9.7 seconds shows that it is actually quite slow, but it doesn’t feel all that sluggish when you are behind the wheel.

That's especially so during everyday driving, because there is an ample supply of torque. The turbo-diesel engine is strong from 1500rpm through to around 3500rpm. You don’t have to push it, the engine just toils away with minimum revs, which is good because it doesn’t rev as smoothly as the D5.

We tested the S40 and V50 in and around Melbourne, which is pretty representative of what they are likely to be used for. But in both urban and undulating environments, the engine is strong enough to both keep up with traffic and deal easily with hills - without using much fuel.

Despite lots of stopping and starting and seemingly endless pauses at traffic lights, both cars used an average of 7.1 litres per 100km, which is excellent.

The new dual-clutch transmission is brilliant and works especially well with the torquey engine. Because the diesel is strong at low engine speeds, the transmission doesn’t have to hunt around for the right gear - it can often stay in a gear for longer when the revs drop.

Around town, the transmission allows the engine to hover around 1500rpm, which making progress very quiet.

Dual-clutch gearboxes are generally very good, but many we've driven are no good in the city. The problem is their indecisiveness in low-speed stop/start traffic and the tendency for jerky clutch take-up. But this transmission seems to work a treat, not showing any problems in the the same kind of driving.

We drove three different Volvo models running the same engine and transmission combination in the same environment. None of them had any issues at low speeds. It really does feel just like a regular torque converter-type transmission in the way it chanegs gear quickly and smoothly.

The only real problem with the new diesel is that it is not a super-quiet or smooth engine like the kind you find in more expensive European models that are so good you sometimes wonder whether there really is a diesel under the bonnet.

This is especially noticeable at idle. There is the diesel clatter, which is one thing, but also a vibration that comes through the steering wheel to remind you once again that you are driving a diesel.

Some people won’t mind this, especially given the fuel economy savings, but it might make it harder to convert petrol buyers into diesel buyers.

Our test drive did not enable us to discover how the cars handled on the limit, but we were able to get a good idea of what it would feel like most of the time.

Both cars have well-weighted steering and suspension that is firm enough for generally good body control without impacting on the reasonable ride comfort.

The interior is quite simple. The dashboard and dials tread a fine line between being clean and simple, and just plain. There are no surprises here, except for the floating centre stack which still looks good. The sound system control display looks dated though, with chunky graphics that show its age.

The seats are comfortable, offering reasonable head and legroom, and one thing you do feel in these Volvos is secure. The top of the doors have a design that makes them look very thick and the B-pillar is certainly chunky. It all gives you the impression that you should be okay if you crash.

The S40’s boot is reasonably small - long, but not all that deep. There is more space in the back of the V50, but the load floor is fairly high, so don’t expect masses of space.

Both the S40 and V50 come with the standard equipment you need for family driving, including a comprehensive safety package comprising electronic stability control and a full suite of airbags, as well as things like cruise control and premium sound.

The S40 and V50 diesels aren’t exciting, but are both competent, comfortable, safe and come with the prestige of a European badge.

The new diesel engine, which is economical yet very good at the kind of stop/start driving many suburban families do, means they makes even more sense as a family car. And the automatic transmission is a treat.