Mercedes says everything it knows about how to build a car has gone into the new E-Class. Being that it is the oldest car brand in the world, that's probably quite a lot of stuff.

The new E-Class went on sale in 2016. On our first drive in Portugal we were mighty impressed, but now we've had the chance to try the E-Class on home turf in the UK, for a proper review. The test car delivered was the big-selling E220d – which uses a new version of the Mercedes 2.2-litre direct injection Bluetec diesel (making 194bhp) – in AMG-line trim, which helps the E-Class to look significantly more purposeful blingy than a regular, SE-spec model.

But the thing that first got us really excited about this car was all its new tech. Mercedes has really gone to town. It's not just in looks that the new E-Class is something of a miniaturised S-Class – it's also inherited the uber-limousine's technology suite, plus a bit more for good measure.

So is the oldest car company in the world now making the most technologically advanced cars on the road?

If you're into tech and cars, you won't get far in the new E-Class before a certain other brand pops up. Yep, Tesla. No, this E-Class is definitely not electrically powered – although Merc will sell you a plug-in hybrid version – but in its on-board system, sensors, screens and all-round abilities to (almost) drive itself, the comparisons with Elon Musk's Silicon Valley car firm are never far away.

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Much of the stuff which helps the Merc to move itself in certain circumstances isn't standard fit – but nonetheless we were pleasantly surprised by the relative affordability of several options, which are bundled into a series of packs and we reckon are well worth having.

The E220d AMG-line list prices at £38,430. For which you get LED lamps, the AMG body kit (complete with the neat 19-inch wheels), heated and partly electric seats, active brake and attention assist, cruise control, and a Garmin MapPilot navigation system running through an 8.4-inch centre screen and leather/Dynamica suede seats all as standard.

Our car had four key options, all of which are worth having.

The Driving Assistance Plus package is probably the first option we'd tick if buying a new E-Class. Not only is it a very reasonable £1,695, but it allows you to show off to your friends – because in traffic jams and a bit beyond, it allows the car to essentially drive itself.

The package includes blind spot warning, lane keep assist and pre-safe/pre-safe plus – which help you avoid hitting other things and prime the car if it senses you're about to be hit from the side/behind.

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But many cars have tech like this. Where the Merc steps it up as gear is Evasive Steering Assist and Active Brake Assist – which, as their names suggest, will help you steer and brake the car if it works out you're trying to take evasive action to avoid hitting another car or pedestrian.

But the big daddy in this pack is something called Drive Pilot. To all intents and purposes, this system is quite similar to Tesla's Autopilot. It uses the systems mentioned above, in conjunction with a system called Steering Pilot to allow you to go hands-off in a traffic jam. The car accelerates, brakes, stops, starts again and steers itself. With the Speed Limit Pilot, and assuming you've specced Comand Online (more on this shortly) it recognises speed limits and will accelerate and brake the car to hit those accordingly, too.

We picked the E-Class up from Silverstone and drove it halfway up the country. Going down the M1 on a busy Thursday evening we stepped out of the car after 200 miles believing it walked on water.

Not only had the swift, 2.2-litre diesel managed to average 69mpg according to the computer, but the car had completed the journey (well, the M1 portions) largely by itself with very little intervention on our part. We set the cruise control to 70mph, joined the fast lane in Northamptonshire and then steered ourselves off into Leeds city centre a couple of hours later.

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In the intervening period, we'd touched the brake and accelerator pedals less than a dozen times. And we'd been impressed by the Merc's genuine ability to steer itself – although it kept nagging us to hold the steering wheel every 10 seconds. However, a five mile traffic jam around Nottingham revealed how, at lower speeds, the computer didn't ask you to touch it and steer so much – to the point we were considering getting in the back and doing emails. No seriously.

The problem comes when the traffic speeds up, when inevitably trying to see if the Merc can cope faster and tighter. At times it can, but then we became slightly alarmed by Steer Pilot's sudden inability to cope. We had to intervene quite quickly on a couple of occasions to make sure we didn't go off the road.

Driving the E-Class with this system, you can see why people crash Teslas. For a good two hours the system had performed infallibly and we had begun to completely trust it. And it's here that the reality check must kick in, because this E-Class isn't truly autonomous – and, we stress to point out, it never claims to be.

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In reality, other than in a traffic jam, it should be having your input. But the technology is so "nearly there" than in many circumstances beyond slow moving traffic, it feels like it doesn't need you. That statement opens up a whole, much bigger debate we need to go through on the way to fully autonomous cars. But that's for another time.

Here and now the E-Class has few approaching-autonomous equals. And for £1,695, with the added safety benefits elsewhere in this pack, the Driving Assistance Plus package feels like a bit of a bargain.

While the Driving Assistance Pack's features are fun, what about actually driving the E-Class?

One of the car's historical issues is that it's never had the dynamic prowess of a BMW 5 Series. Yet the 5 Series has become so comfortable and refined that it's pretty much eaten the E-Class's breakfast. The new Merc sets out to right those wrongs, and comes within a whisker of succeeding.

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It's not too great an overstatement to say it feels like Mercedes hasn't just evolved the E-Class one generation compared to the last car, but two. It feels like such a well-honed, well-mannered and impressive car that, at times, it's hard to relate it to the car it replaces. It's that much better.

It is fantastically refined, for a start. Yes, on the AMG wheels and suspension the ride is harder-edged than we'd like, but it's hardly what you'd call uncomfortable. And it remains, in almost all circumstances, a quiet, refined and comfortable ride.

But compared to the new 5 Series? Unfortunately for Merc, BMW has upped its game even further. The 5 Series steers, handles and generally goes with just that bit more vim than the E-Class.

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It's not that the E-Class is ever less than impressive – it's just that if you drive it like you stole it, it doesn't put a smile on your face in the same way that the 5 Series does. It impresses and garners your respect, rather than rewards you as a driver. And you know what? That's just fine – it treads a different tack to the BMW, and we think for a more mature driver the E-Class could be the better proposition.

We've moaned long and hard about how Merc's Bluetec unit sounds clattery and feels quite coarse in some installations. Throw the new 2.2-diesel engine into the mix and while the numbers and designation are the same as the old, the newer engine is impressive. The figures speak for themselves: 194hp, 0-60mph in 7.3 seconds, official 72.4 mpg combined, with CO2 emissions of just 112g/km. Compare that to a car of just a few years back (and some of its rivals) and it's mighty impressive. The fact that a gentle motorway cruise yielded 69mpg for us and that we never really wished we were in the larger-engined 350d model, says it all.

The engine is paired (as standard) with a super smooth 9-speed automatic gearbox which slushes its way through the gears with little more than a change in engine note. You can manually change via the paddles, but most of the time you don't need to.

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Complaints are limited to the slightly dull steering, and the aforementioned hard edge to the ride. For a quick strop, we'd take a 5 Series. But for day-to-day, an E-Class might be the one.

The exterior design of the new E-Class is distinctly more svelte than before – a miniature S-Class that removes many of the uncomfortable surface treatments of the car it replaces. It brings elegance back to the Merc design playbook.

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But it's inside where you'll notice the most difference, as the E-Class's cockpit is quite the tech fest. But be aware of the options fitted to our test car and shown in the pictures.

The Comand Online system upgrades the centre 8-inch display to one that's 12.3-inch wide, and drops into it Apple CarPlay and Android Auto, 3D navigation with live traffic info, speed limit assist, and something called "me connect" which brings you concierge info, online connectivity, and car-to-smart-device communications.

If you're ticking the £1,495 option box for the Comand upgrade, we recommend you also budget another £495 to get the 12.3-inch digital cockpit – as when the two are joined together, you get what appears to be an unbroken, 20-inch widescreen – each unit running at a resolution of 1920x720px, which is the highest in this sector.

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However, it is worth noting that the £1,990 Mercedes will make you shell out to get these two screen options, BMW give you for free in the 5 Series. The way the BMW's displays are set out aren't quite as impressive, or quite as big, or configurable – but all 5 Series' get BMW's Pro Media system, with 10.2-inch centre display and a digital instrument cluster.

If you feel like splashing out then an extra £3,895 will nets you keyless go, a panoramic roof, a very good Burmester stereo, and more advanced LED lights. We could live without these extras, given the price. 

While the E-Class's fully digital pair of displays made our jaws drop at first sight, their usability irked us somewhat.

They're endlessly reconfigurable – the digital driver cluster offering classic, sport or progressive look options (most of our pics show it in progressive, where you can choose what info you want to display either side of the central rev counter/speedo) – and controlled through a pair of touch-sensitive pads on the steering wheel, which take some getting used to using.

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If you've used Merc Comand before, then you'll be fine. After a week with it we were getting the hang of it – but compared to BMW's iDrive or Audi's MMi we found the Merc system a little less intuitive; it's just a little more complex and fiddly.

Regardless, the cockpit is a stunning place to sit. With a slab of open grain wood on this model stretching from the door tops across the dash, underneath the double screens, it looks slick, modern and avoids the old-man look you might be expecting.

The central controller with touchpad on top was, again, something we found a little fiddlier to use than the BMW and Audi equivalents. This controller works in much the same way as its rivals but does without some of the menu button shortcuts and has some soft-key function shortcuts that we found too easy to miss.

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One thing we didn't miss was the lack of touchscreen functionality. BMW has now added this in to its iDrive system, and on Audi it is incoming (the A8 exemplifies this). But for now Mercedes continues with the rotary/steering input control system only. And after the system initially distracted us with its complexity, we found that – as ever – this approach to user input meant we could keep our eyes on the road more of the time.

Verdict

Having lived with the Mercedes E-Class for a week, we've come to enjoy its breadth of abilities and optional technologies. And considering during that time we had expected the total price to topple the £50k mark, we were pleasantly surprised by its £46,655 total (with all the extra trimmings). Not that we'd go as far as calling it "a bargain", but it's good value compared to some of its competitors and the standard spec is strong.

Mercedes has fixed our main gripe with the older model – the rattly diesel engine – and for those covering significant mileages each year the E-Class would be a superb place to do it. It goes without saying that it feels like it's built from rock, has a massive boot and plenty of space for five people.

Mercedes has a saying: "the best or nothing". And the new E-Class gets incredibly close to being the best; it's a whisker away from a full-marks score. Only its slightly knobbly ride, the overly complex user interface, and the fact that it can't involve the driver like a BMW 5 Series, hold it back.