The Peugeot 106 Phase 2 (internal code 1A/C) was introduced in April 1996. Sharing its platform and powertrains with the Citroën Saxo, it featured a more rounded, modernized exterior and improved safety equipment (addition of side impact bars and airbags) compared to Phase 1. Positioned as a versatile city car, it is renowned for its lightweight chassis, agile handling, and exceptionally low running costs. The diesel variant, powered exclusively by the 1.5L naturally aspirated TUD5 engine in Phase 2, is legendary for its bulletproof reliability and outstanding fuel economy, often exceeding 300,000 km with basic maintenance. While lacking modern safety and refinement, it remains a highly sought-after economical survivor.
The Peugeot 106 Phase 2 1.5D is an automotive cockroach in the best sense of the word: it will survive almost anything if given basic oil and water. While it is undeniably slow, noisy, and lacks modern safety features, it remains one of the cheapest ways to cover miles on the planet. If you are buying one today, the primary concern is not the engine, but the chassis: check meticulously for rust and ensure the rear axle has been rebuilt or is in perfect condition. For a pure budget commuter, it is a highly recommended purchase.