This paper deals with low-cost phase noise testing of sinusoidal analog/IF signals. The idea is to perform over-sampled 1-bit signal acquisition using standard digital ATE and to apply dedicated post-processing in order to retrieve the phase noise level present in the analog/IF signal from the captured binary vector. A first algorithm has already been developed, which shows an excellent agreement with conventional phase noise measurements on a large range of injected noise but diverges from conventional method in case of very low phase noise level. In this paper, we present a new processing algorithm that permits to alleviate this limitation. Both simulations and hardware measurements are realized to validate the technique and results clearly demonstrate the improved performance of the new algorithm.