Toyota Corolla (hybrid) estate. Very reliable so excellent long term prospect, decent interior space (the estate has a longer wheelbase then the hatchback) and a large boot. Go for the 2.0 if you like bit of oomph, otherwise the 1.8 is fine and you'll get a younger one for your budget.

Looking to buy a new car and would really appreciate any recommendations as our circumstances have changed and therefore unsure where to start. Essentially have had an unexpected inheritance which has massively improved our budget, lucky I know.

We have £20k cash and would pay monthly too possibly. We are a one car household so do fairly high mileage, both some city miles and also regular longer journeys. Would want to keep the car for several years, reliability, good warranty and decent mpg important - currently getting 60mpg from our diesel Peugeot. Appreciate electric different and would consider an EV but not sure where to start. Not entitled to any workplace scheme for those.

We need decent space due to dog/holidays/hobbies etc.

Hate paying interest if possible and would prefer to own rather than lease.

To add to the already excellent suggestions, it's worth going the hybrid petrol engined route because a) they aren't that far off the 60mpg you want, but also b) they don't have to be, because petrol is about 5-7% cheaper than diesel, which makes up some of the difference.

The other benefits are that diesels are now out of favour due to reliability issues over the longer term, mainly second-hand ones, because earlier owners did not maintain them correctly and/or drove them mainly for short distances from cold, damaging the DPF etc over time, and often why they part company with them early.

With all the stricter environmental measures for cars in cities, petrols, especially hybrids, should be able to be driven into such ULEZs without penalty for longer, because they emit less nasties of the type the legislators don't like, which is why petrol engined cars with a EU4 rating (from the early 2000s) like my 18yo Mazda3 can drive into London without needing to pay the high ULEZ charge, but an EU4 or 5 diesel car must do (it needs to be EU6 rated, from around 2016 to be exempt).

I'd personally go for the Toyota, as its auto gearbox is more reliable when used in an urban setting than dual clutch units like the VAG 'DSG'. The Superb is otherwise an excellent car, and would probably be fine if bought new rather than second hand, but your funds may not stretch to that even after adding on whatever you get for your existing car.

I would also recommend getting cars shod on 'sensible/ sized, medium+ profile tyres such as the 16in ones previously described. Better ride quality, slightly better mpg (due to slightly less grip because the tyres aren't so wide - no problem for safety) and far less susceptible to damage (and the alloy wheels) from kerbing and potholes, plus both wheels and tyres last longer and much cheaper to replace when needed.

Best of luck.