The lines between small vans and cars are becoming increasingly blurred as manufacturers keep producing new variants in a bid to plug every single gap in the market.

The Volkswagen Caddy Maxi is a good example of this trend. The manufacturer offers the Caddy as a  standard van, a crew-van, a car with windows all round and  the Maxi Kombi Window van on test here, with an extra window on each side so that rear seat occupants can see out. The significance of these is that fleets can’t reclaim the VAT, unless the van is used exclusively for business purposes.

That will rule the window version out for many companies. Some drivers who also have use of a van at weekends may be interested as it is doubtful that family members will want to be squashed up in the back with no side views. At selling time this variant is likely to attract more bids.

For business-only users, our test model costs £15,470 ex-VAT. For others it’s a more hefty £19,546. But even at this price that’s a fair amount of metal for the money.

For example, you get as standard a 1.6-litre turbodiesel engine that is slated to return almost 50mpg on the combined cycle, and an array of standard specifications, including electronic stability programme – with anti-lock braking system, electronic differential lock, traction control system, engine drag torque control and electronic brakeforce distribution – plus manual air-con, an MP3-compatible CD player, a multi-adjustable driver’s seat and steering wheel, and of course Volkswagen’s legendary build quality and reliability.

Our test model also had alloy wheels at £480, a touchscreen sat-nav system at £505, and rear parking sensors at £240. Surprisingly, electric windows and electric heated mirrors are also on the options list at £295.

One of the great things about vehicles like this is their versatility. There is seating for five with plenty of legroom for all, and even with the seats up, there is still 1.6 cubic metres of space in the back. There’s even an option of a third row of seats. The seat backs fold down and the rear rows can be removed altogether, although it is a fiddly job and not for the faint-hearted.

The driver’s seat is softer than the slab-like ones typically found in German vehicles, but still proved supportive enough and there are plenty of storage places, including an overhead shelf, plus four coffee cup holders.

The engine fires up smoothly and quietly and the Caddy is a joy to drive, with a nice slick gearchange and pin-sharp handling. At 102bhp there is plenty of power on offer for any fleet purpose. If that’s not enough, there is also a 2.0-litre 140bhp variant on offer.