The Peugeot 106 Phase 2 (1A/C), introduced in April 1996, is a heavy restyling of the original 1991 model. Developed alongside its twin, the Citroën Saxo, it features a modernized exterior, improved crash safety (though still poor by modern standards), and updated powertrains featuring multi-point injection to meet Euro 2 and Euro 3 emissions standards. Positioned as a lightweight, agile A-segment city car, it gained a legendary reputation for its handling, particularly in its sporty iterations (Rallye, S16/GTI). Today, standard models are highly valued as cheap, reliable runabouts, while the sporty versions are sought-after modern classics. Overall, it is a mechanically robust car, though plagued by a few well-documented PSA-specific flaws from that era.
The Peugeot 106 Phase 2 is a brilliant, back-to-basics lightweight car. For a daily driver on a tight budget, the 1.1i or 1.4i are fantastic choices, offering reliability and extremely low running costs. The 1.5 Diesel is a marathon runner but lacks refinement. The sporty S16/GTI and Rallye models are legendary hot hatches that are rapidly appreciating in value. However, any prospective buyer MUST inspect the rear axle and check for head gasket leaks. If you find a rust-free example with a healthy rear axle, it is a highly recommended purchase.