This is an amazing time for automobile enthusiasts. Not only is automobile technology improving, but luxury vehicles of all types are cheaper. From the affordable tech-packed Tesla Model 3 to the fun Subaru BRZ, it seems like the market offers something for everyone. The subcompact luxury SUV segment is full of fun-sized all-wheel drives to meet consumers’ needs. Two of the newer examples are the 2020 Volvo XC40 and 2021 Audi Q3. Both of these subcompact luxury SUVs not only cost under $40,000 but received a score of 8.3 from U.S. News.

The 2020 Volvo XC40

The Volvo XC40 was unveiled in September 2017, making it one of the relatively new contenders on the scene. It’s the first Volvo model to use the new Compact Modular Architecture (CMA) platform. The entry-level XC40 is one of the lowest-priced luxury subcompact SUVs in its class. Nonetheless, Volvo has incorporated some style and flair usually found in larger SUVs like the XC60 and XC90. Its exterior is sleek while the interior is voguish yet simplistic. But some Volvo buyers have expressed disappointment in Volvo’s standard T-Tec upholstery— a combination of cloth cushion coverings and synthetic leather bolsters.

A 187-horsepower turbocharged four-cylinder engine comes standard, while a 248-horsepower variant is optional. Reviews have stated that no matter which version of the turbo-four is under the hood, the XC40 feels “punchy.” Its acceleration is great with high-end passing power on the freeway.

Volvo’s optimization of interior space is considered the XC40’s central feature as it increases its cargo space significantly. With the rear seats up, it has 20.7 cubic feet (0.59 cubic meters) of cargo space; with the rear seats down, cargo space increases by double to 47.2 cubic feet (1.34 cubic meters).

The versatility of the cargo space allows one to further increase that space with a fold-up cargo floor. Real-world utilities such as hooks for bags and a cargo divider are a few unique features that help owners make the best use of the XC40’s space. According to U.S. News, the 2020 Volvo XC40 also provides superior seating than most other luxury SUVs. Both rows of seats provide plenty of headroom for even taller drivers and passengers. Optional upgrades include things like a hidden container beneath the driver’s seat.

The 2021 Audi Q3

The 2021 Audi Q3 is the German luxury brand’s smallest crossover SUV. In 2018, Audi gave the second-generation Q3 a complete makeover built on the MQB platform. According to reviewers, the new Q3 ranks near the top of the luxury subcompact SUV segment.

The new Audi Q3 crossover has a turbocharged four-cylinder engine that produces 228 horsepower and 258 pound-feet of torque. It’s paired with an eight-speed automatic transmission and Quattro all-wheel-drive—a standard feature. That combination gives the Q3 enough power for both driving around town and merging onto the highway. Reviewers wrote that it never felt strained, although critics claimed rough shifting. It also features five drive modes that allow one to adjust throttle response and suspension firmness for greater comfort or agility.

A Q3 Sportback version was revealed in July 2019. The Sportback is slightly lower, less broad and longer, and has distinct body cladding, side skirts, as well as front and rear bumpers. The Q3 Sportback was designed to be a competitor of the BMW X2 subcompact SUV. The sportier design provides less headroom since the roofline and raked rear hatch are lower than the regular Audi Q3.

The 2021 Audi Q3 now features the S-Line exterior styling and lane departure warning standard.

Despite having less space behind the rear seats, the cargo area offers 23.7 cubic feet (0.67 cubic meters) of space. For a subcompact SUV, that’s a fairly decent amount of space, although the total space behind the front seat is below average.

Which one is the best buy?

The 2020 Volvo XC40 starts at $33,700, which is below average for a luxury subcompact SUV. If you want one of the higher two trims, you’re looking at paying approximately $39,950 to $40,450. As for the 2021 Audi Q3, the Premium trim costs approximately $37,095. If you don’t mind going over $40K, the Premium Plus is only $500 more. The 2021 Q3 model costs right around the same but offers more under the hood than the 2020 XC40. Furthermore, the standard interior offered by the Audi is also better than the Volvo. Other than the XC40 having more overall space, the newer Audi seems to offer slightly more for around the same price.