It depends on how much space you need, really, but I'd suggest you save yourself a bundle of that €20k budget and grab a Volkswagen up!. Slick to look at, nice to drive, 50mpg all day long and yup, you can spec it with heated seats. Hard to think of many better cars for getting about town in. New, you shouldn't need to spend more than €14k even if you go mad with the options list. Used? You might squeak in under €10k for a nice one. 

 

If you do need more space, then keep it simple and go for a Golf. A year-old 1.2 TSI (you're mostly driving in town so don't bother with diesel) will fit the bill well. You could have an Audi A3 of course, but why spend extra on the badge? A BMW 1 Series is fun to drive but you're going to be in town so it's a bit pointless too.