Audi's A3 is a compelling entry-level luxury car, but it lacks some expected features for its price, and the interior, although well made, feels austere. It's solid and quiet, and has a drum-tight body structure. Crisp handling and a firm, controlled ride make the A3 enjoyable to drive. We tested it with the now-discontinued 1.8-liter engine, which delivered a respectable 27 mpg in our tests. The cabin is quiet, and the front seats are comfortable and supportive. The rear seat, however, is tight. It takes a bit of time to get used to the MMI infotainment system, but it ultimately proves logical. It's easy to hit $40,000 with just a few options. A sporty S3 with a 292-hp, 2.0-liter turbo; a convertible; and a hatchback plug-in hybrid are available.

The wholly redesigned Audi A3 is part of a wave of compact luxury-branded models for buyers who have one eye on their budget and the other on gas prices. While it's tempting to get the basic Premium model, with the 1.8-liter engine for its relatively low price, you might be happier with the Premium Plus trim, which includes more of the features you expect in a luxury car and lets you get the Driver Assistance package, which includes blind-spot monitoring. For 2016, Audi added a standard backup camera, heated mirrors, and a USB port -- replacing the optional media interface and its unique Audi proprietary cable. Also, a front-wheel drive hatchback with a plug-in hybrid powertrain joined the line.

The A3 is an upscale little hatchback with a tasteful interior and, in most versions, a gutsy turbocharged 2.0-liter, four-cylinder engine. Closely related to the VW Golf and Jetta, the A3 hatchback resembles a small wagon. Front-wheel drive is standard; all-wheel drive is available as an option. We found the A3 quite nimble and quick in our tests, but the steering feels a little too light at low speeds. The automated manual S-tronic transmission works very well. A more powerful 3.2-liter V6 was optional on front-drive and standard with AWD models until 2009. Starting with 2010, the V6 went away and a 140-hp four-cylinder diesel joined the lineup. The 2013 models were the last year for this version of the little hatchback, as a new sedan replaced it for the 2015 model year.