I agree with you that government economy figures for new cars are often deceiving, as they are here in the US. But surely anyone with a modicum of sense must realise that a fuel economy is relative to vehicle size and therefore being realistic in your expectations has to be uppermost when making a purchasing decision. I’m amazed that CH expected his new Mercedes-Benz to be significantly more economical that the BMW it replaced: 23-25mpg around town and 34mpg on motorways seems about right to me.

There’s only so much energy in a gallon of petrol or diesel, so it stands to reason that any medium sized car is going to average about 30mpg, a supermini about 40mpg and a luxury motor around 20mpg, with significant variation depending on driving habits and type of trip. If economy was a major driver for a new car purchase, then why not buy a supermini like the Fiat 500 or any number of the other models that you recommend, or save the cash by keeping the BMW and driving it into the ground? Whatever CH paid for his B160 over what he got for the 3-Series would probably buy a lot of petrol.