Some cars come with stories built in. Others start writing the story the moment they land in your garage. My new project car, a 1995 Peugeot 106 Rallye, somehow manages to do both. It’s a featherweight ball of French energy that has already captured my heart, despite being nearly as old as I am. This is a car that doesn’t just drive. It urges you to get involved.

I picked it up from D1 Imports not long after publishing a story about them here on The Late Brake. If you read that article, you might remember the car making a quiet appearance in that post. I didn’t want to jinx the deal, but the keys were already halfway to my pocket. So here we are. A proper follow-up. Only this time, I’m not just writing about the magic of the 106 Rallye. I’m living it.

Buying the Car From D1 Imports

I’ve had my eye on the 106 Rallye ever since I saw it on the D1 site a couple of weeks before my tour. Like many enthusiasts, I fell down the rabbit hole of obscure European hot hatches that never made it to the States. I had always wanted a Peugeot 205 Rallye, and this was like a miniature version, and more importantly, actually available for sale. Peugeot’s Rallye line — both the 205 and now the 106 — always stood out as gems. But trying to import a good one? That’s a whole other headache.

Thankfully, D1 Imports already had one waiting recently imported from Japan. During my tour, I was offered a test drive in the car. I had ZERO intention to buy it at the time but I wasn’t going to say no to driving a Peugeot for the first time. I took it around the block with my wife and I instantly feel in love. But let’s face it, this would be my 4th car. I absolutely didn’t need it and my emotions left me to do the logical thing and let this one go. That’s when my wife uttered the fatal words: “This is so fun, we should get it”. Immediately then I was filled with those pesky emotions and told Luke at D1 I would be in touch. 4 days later, I made him an offer and we closed the deal. A few weeks later, it was on a shipping truck on the way to my house. I thought, “What have I done?”.

The day it arrived was surreal. Seeing a car this rare, this weird, parked in my garage felt like getting away with something. It wasn’t perfect, but that was part of the appeal. These cars were made to be driven, not babied. And this one had just enough patina to feel honest. After drooling over it for a while, I did what every car person does with a new car. I cleaned it. Spending an intimate hour or so with a new car is one of the best feelings. You finally have time to go over the entire car top to bottom and really get to know it. I gave it a good vacuum and a coat of wax so it was ready for its first Cars and Coffee.

Most people didn’t recognize it. Some assumed it was a base model Geo or some sort of ‘90s Honda. But for those who know, it’s like a secret handshake. A knowing nod between people who still care about the feeling of driving over everything else. I will go on record here and say the Peugeot 106 Rallye is the perfect cars and coffee car. Load of fun to drive, low key enough to not draw attention, but loaded with unobtanium rally-bred steez to get the real enthusiasts to chat.

What is the Peugeot 106 Rallye?

Let’s get something straight: this isn’t your average hatchback. The 106 Rallye Phase I was Peugeot’s love letter to homologation — a stripped-back, firecracker of a car designed so they could go racing. Designed specifically for the Group N rally class in the 1990s, a class based on production vehicles with limited modifications limited to suspension and safety items, like gages and fire equipment. Built from 1993 to 1996, this car wasn’t about luxury. It was about lightness and simplicity, creating an experience that could mimic the thrills of rally without the need for gravel or a co-driver screaming notes into your ear. It even has a Homologation plate on the crash bar.

Under the hood, the Rallye packs a high-revving 1.3-liter four-cylinder engine (the TU2J2) making a modest 98 horsepower. That number might not impress on paper, but the magic lies in the details: a 1294cc motor with a ridiculously short final drive, paired with a curb weight of just 825 kg (about 1,820 pounds). That’s lighter than most Miatas, and it shows in every corner. Miata isn’t always the answer apparently. While the car itself doesn’t “rip,” it sure feels like it every time you mash the throttle and row the gears. You can go wide-open throttle to red line through 4th gear and still not be speeding on the highway. This car is the epitome of “slow car fast” and I love it. Ringing out every ounce of of power while the high compression pistons and uprated cam scream is something that never gets old. Pair that with almost instantaneous throttle response and there is really no substitute.

Step inside the 106 Rallye and you’re greeted by an interior that screams “function over form” in the best possible way. The dashboard is refreshingly simple, no unnecessary curves or fancy materials, just honest black plastic punctuated by essential gauges that tell you everything you need to know. What immediately catches your eye, though, is the flamboyantly red carpet that covers nearly every surface of the floor, a bold design choice that somehow manages to feel both playful and purposeful. The pièce de résistance is the floor-mounted shifter. Sitting perfectly positioned within arm’s reach practically begging you to work through the gears. Reminiscent of the similar style shifter found in a VW Type 2, although the Rallye’s is exceptionally more precise and shorter in throw. There’s no pretense here, no luxury touches trying to mask what this car really is. Every surface, every control, every detail exists for one reason: to connect you with the driving experience. It’s spartan, sure, but in a way that makes you appreciate how little you actually need when the fundamentals are this well-executed.

A 30-Year-Old Hot Hatch That Still Delivers

Let’s be honest, you don’t buy a 106 Rallye because it’s fast. You buy it because it’s fun. There’s a crucial difference there. Speed is impressive. Fun is addictive. And this car is fun in the purest sense.

The steering, unassisted and alive, tells you everything happening under the skinny front tires. The gearbox is short and notchy, practically begging you to redline every gear as the power doesn’t get on until about 5K rpm. And the way the engine screams to its 7,200 RPM redline makes you feel like a Group N driver even if you’re just merging onto the freeway. I love being able to go as hard as the car can without worrying if I’m gonna die or be arrested. Yes, it’s slow, but I haven’t driven it yet without a massive grin. The other day I literally was passed by a UPS truck while I was at full throttle, but I couldn’t care less. Fun is better than fast.

At thirty years old, it’s not without its quirks. The interior creaks, more so without the sound deadening. The ride is a bit bouncy. And the exhaust rattles like a coffee can full of bolts if the road surface gets rough. But you forgive it instantly once behind the wheel. This thing has charm for days, and that is missing in modern car culture. Its important to remember ventilated seats, heater wiper blades, and Bentley quality sound-deadening as what they really are: a nice-to-have, not a need-to-have. Driving the 106 Rallye is a reminder of how disconnected modern cars have become. No drive modes. No frills. No screens, except my phone running a GPS-based MPH conversion app. Just an engine, a gearbox, and a chassis that feels like it was tuned by people who cared about joy. And that’s increasingly rare, but it’s why I bought this car.

Why This Weird Little Car Matters

The 106 Rallye isn’t just cool because it’s rare. It’s cool because it represents a philosophy that’s increasingly hard to find: build something light, simple, and fun. Forget Horsepower figures and YouTuber mega builds. Forget touchscreen interiors. Just drive something that makes you smile every time you drive it.

As car culture evolves, something is refreshing about revisiting the roots. These old hatchbacks might not dominate Instagram feeds, but they’re the backbone of enthusiast culture. Affordable, engaging, and a little rough around the edges, just like the best driving stories.

Beyond that, I’m just excited to drive it. Cars like this are best enjoyed on backroads, coffee runs, and spontaneous evening cruises to get ice cream. It doesn’t need to be fast. It just needs to be fun.

So here’s to a new chapter in my project car life. The 106 Rallye is small, scrappy, and weird in all the right ways. It might not win races, but it’s already won me over.