It had to happen eventually: the VW Golf has been dethroned as our favourite small tow car by the brilliant new Skoda Octavia. Either car would have been a worthy winner, but the Octavia outpointed the Golf, thanks to its huge cabin and impressive value, as well being superb to tow with.

No other small family hatchback packs in so much space for passengers or luggage. In fact, the new generation is not really a ‘small’ family hatchback at all: it has enough head and legroom to rival larger cars, especially for those travelling in the rear seats. The interior finish has also taken a big step forward compared with the previous generation.

You won’t need to travel light in the new Octavia. There are 590 litres of luggage space with the rear seats upright – that’s 210 litres more than the Golf offers. We found space for our entire typical touring luggage load, with room to spare. That helped the Skoda achieve a strong score from our practicality testers, as did the inclusion of a trailer stability control system.

When a car is fundamentally as stable towing a van as the new Octavia, you shouldn’t need to rely on electronic help very often. Even in the fastest run between the cones in our lane-change test, the Octavia stuck to its course, however much the caravan slid around behind it.

Despite a damp test track the braking performance was excellent, and the 30-60mph time of 12.7 seconds shows the strength of the 2.0-litre diesel engine. Thanks to excellent fuel economy, the Octavia should prove cheap to run for a car with such a strong performance.