Peugeot 106 Rallye Buying Guide

French hot hatch was a hit when new, and while it’s since lost none of its desirability many have led hard lives. Here’s what to look for when buying used

In association with

How much to pay

• Project £1000-2000 • Good £3000-4000 • Concours £4000-5000 •
Most Expensive at Auction: £6000 (Mint S1 with full service history)


Practicality ★★★
Running costs ★★★★
Spares ★★
DIY friendly ★★
Investment ★★★
Desirability ★★★★

Lots more on classic Peugeots here…

With the seemingly weekly announcement of yet another French hatchback from the 1990s changing hands for well above auction estimates, it’s refreshing to find a desirable modern classic from this era that can still be had for a reasonable sum.

The Peugeot 106 Rallye is one of them. Released three years after the launch of the 106 range in 1991, this stripped-out hatch was essentially a homologation special built to allow the French manufacturer to participate in the all-important sub-1.3-litre category. It came without any weight-adding fripperies such as electric windows, alloy wheels or excessive soundproofing – and Peugeot saw no need to add safety devices like airbags or ABS, either.

The TU-series engine got a working over, too. It received a wilder camshaft, fuel injection and a high-compression head, which gave the Rallye a decent 100bhp. Even at its sub-850kg kerbweight, though, the little car needed every last rev of its 7200rpm range to make decent forward progress. From 1998-on, the Phase II S2 models arrived. Fitted with a slightly reworked 1.6-litre motor taken from the 306, they gained a mere 3bhp, but mid-range flexibility was boosted.

The real fun with these cars is to be had in the corners. The Rallye shares most of its suspension set-up with the earlier 106 XSi, and also has that model’s springs and dampers but with thicker anti-roll bars. Combined with the low-weight steel wheels and that revvy engine it was, and still is, a hoot to drive.

The Rallye provides the kind of involved, multi-layered driving experience that defined the French marque in its hot-hatch golden age. However, unlike with some rivals – including Peugeot’s own 205 GTI – decent examples can still be found at a relatively accessible price point.

Your AutoClassics Peugeot 106 Rallye inspection checklist


As tough as the TU engine is, most Rallyes have led a hard life and evidence of a regular service history is not always guaranteed. Check for excessive smoke on start-up, oil around the rocker gasket or any untoward noises when accelerating hard.

Oil services should be done every 6000 miles, while cambelts should be changed every three to five years. Rough running can usually be traced to damaged HT leads, although the 1.3-litre cars tend to have lumpy idles while cold.

Many have accrued high mileages over the years. While most common parts are still available, if you’re considering a full rebuild beware that certain components such as OEM pistons are hard to find. Getting in touch with car clubs such as is a good idea.

Classic cars for sale now


A close-ratio five-speed manual transmission was used for all Rallyes. While it was a robust unit that didn’t have to deal with an abundance of torque, enthusiastic driving can wear out the synchros, especially when shifting between first and second gear. Stiff actuation when cold is considered normal.

Suspension and brakes

The S1 has discs up front and drums in the rear, while S2s have discs all round with the fronts being ventilated. Suspension set-ups are broadly the same between the two cars, and both should feel taut to drive although a degree of lean in the corners is normal. Brake conversions are not uncommon, especially on S1s.

A lack of power steering makes parking manoeuvres a bicep-strengthening routine, but it lightens up as the speeds rise. Power steering did become an option on later cars, but finding one so equipped is quite rare.

Check the shocks for leaks and the front discs for warping. The former can lead to wallowy handling, while the latter will reveal itself through a shuddering brake pedal. Suspension rubbers will need doing on most older cars, and check for any evidence of odd tyre wear as this could mean the tracking is out.


Peugeot has been slowly phasing out the supply of certain Rallye parts over the years, so items such as decals, badges, Rallye-spec front wings and bumper inserts are very hard to find.

Rust is common, and you should get the car on a lift as some of the worst trouble spots are hidden from view. Look carefully around the wheelarches, wings, wishbone mounts and fuel tank. The plastic body kit can also hide corrosion.


The Rallye is a stripped-out version of a budget hatchback, so don’t expect much in the way of soft-touch plastics or the fine smell of Nappa leather upholstery. What you do get are exposed steel door panels, shiny dashboard plastics and a lot of rattles. This is all par for the course, and it’s quite normal for trim pieces to be loose or missing. None of this should be a problem unless you specifically want a mint-condition example.

Most cars tend to have aftermarket radios. These and the 1990s-era alarms that have often been fitted can wreak havoc with the wiring. Check that there are no warning lights on the dashboard, and that all switches and buttons work as they should.


  • 1991: Peugeot 106 range introduced as entry-level hatchback to replace ancient 104
  • 1993: S1 Rallye with 100bhp 1.3-litre engine, uprated suspension and stripped-out interior introduced. 1000 units built in total
  • 1996: Phase 2 106 introduced with a number of updates such as airbags and side-impact bars. GTI with 120bhp 1.6-litre 16-valve engine tops range. This model is badged as a Rallye in some European markets
  • 1998: S2 Rallye replaces S1. Now with 103bhp 1.6-litre engine and disc brakes all round. Power steering optional
  • 2003: Peugeot 106 production ends

As of July 2018, approximately 151 Rallyes are licensed on UK roads, with 590 registered as SORNed

AutoClassics says…

The lowish price levels are a double-edged sword here, as many of the cheaper 106 Rallyes have been used and abused by owners who may not have been all that fussed about maintaining fully stamped service books. A fair number have also been used for track days, and although this is not necessarily a deal breaker, watch out for tired examples and poorly repaired accident damage.

Some consider the earlier 1.3-litre S1 cars more desirable thanks to the limited production run and their buzzier nature. However, the S2 versions offer a touch more mid-range flexibility and came equipped with a few additional ‘luxuries’. Compared with anything made in the past decade, they both offer a level of raw driving appeal that makes either one a great choice.

A rather high attrition rate means that you cannot be too picky and may have to settle for a car that needs a bit of work. The good news is that running costs are very reasonable – and as long as you know what to look out for, these little cars are still a fantastic piece of kit.


S1 1.3-litre 8-valve inline-four
  Power 100bhp
  Top speed 113mph
  0-60mph 9.2sec
  Economy 40 mpg est.

S2 1.6-litre 8-valve inline-four
  Power 103bhp
  Top speed 121mph
  0-60mph 8.4sec
  Economy 38 mpg est.

Picture courtesy of MagicCarPics

Looking to buy the perfect classic Peugeot? Step this way...

Classic Cars for Sale