Luxury cars aren’t just for the ultra-rich any longer, and this has driven nearly all the major luxury car manufacturers to produce models for less than $40,000. While this range of vehicles continues to grow, it becomes increasingly difficult to tell the true quality vehicles from those that sacrifice quality and comfort for a low price.
We took a deep dive into this realm of (relatively) inexpensive luxury rigs to find the eight best luxury cars for under $40,000.
Audi has been steadily building its brand to tackle the likes of BMW and Mercedes-Benz, and the byproduct is a lineup that frequently tops lists. Enter the A4, and Audi finds itself atop our list of the best luxury cars under $40,000.
With its $36,000 base price tag, we can work tons of options into the A4 and still stay under our $40,000 cap.
Base MSRP: $36,000
Advanced and easy-to-use infotainment system
Standard automatic emergency braking
Poor nighttime visibility
Blind-spot monitoring comes at a hefty price
190-horsepower base engine is underwhelming
Having firmly moved itself away from being classified as a lineup chock-full with warmed-over Toyota models, Lexus finds itself high on our list with its popular ES sedan.
Though it matches the No.1 A4 well in many areas, and even bests it in some — like its headlights and trunk space — it falls short in others. The ES’ most notable shortcomings are in the handling department, as it is just average in routine handling, emergency handling, and braking.
Base MSRP: $38,900
Good pop from its 268-horsepower V-6
Lacks luxurious feel
Annoying Remote Touch Interface
Feels like you’re driving a Camry
Lincoln is another emerging luxury brand that’s steadily separating itself from its parent company, Ford. It’s come so far in recent years that its MKZ finds itself No. 3 on our list of luxury cars under $40,000.
What truly puts the MKZ so high is its lineup of engines that includes a 400-horsepower twin-turbo V-6 engine that is available just under our $40,000 threshold at $39,670. That said, its 265-horsepower 2.0-liter turbocharged engine is nothing to sneeze at either. Hell, you can even get the hybrid version and wind up at just $35,170.
Base MSRP $35,170
All powertrains are accessible
Potent turbocharged V-6
Luxurious look and feel
Intuitive and easy-too-use infotainment system
Thirsty turbocharged four-cylinder engine
Visibility hampered by its styling
Tight rear seats
Awful nighttime visibility
BMW 3 Series
Of course BMW had to make it on the list with its 3 Series, but it’s surprising that it sits behind Audi, Lexus and Lincoln models. In years past, this would be blasphemy, but that’s the way the luxury segment has shifted lately.
While the 3 Series does have a slew of powertrain options available, including a diesel and a few potent V-6 models, the only one that falls under our $40K limit is the 320i and its 180-horsepower 2.0-liter four-cylinder engine. This engine does leave a lot to be desired, but you’re still getting BMW quality and handling.
Base MSRP: $34,900
Available all-wheel drive
Good fuel economy
Tight rear seat
Not as refined as some competitors
Advanced safety features are expensive options
Funky gear selector
Fifth on our list, we have our second Audi model. This time around, it’s A3.
While its big brother, the A4, knocked it out of the park in almost every category, the smaller A3 has a few hiccups here and there. It starts with powertrains that leave a little to be desired, like the 189-horsepower 2.0-liter, and continues with a tight cabin with limited wiggle room.
That said, you’re still getting a great luxury car at a bargain with the A3.
Starting MSRP: $31,950
Feels luxurious, even with its low price
Comfy front seats
Leather upholstery is standard
Tiny rear seat
Feels a little too much like a VW Jetta
Looks are bland at best
The most intriguing part of the S60 is its lineup of impressive engines, but to fit under our $40,000 budget, we have to limit it to the 240-horsepower T5 powertrain. Though it is the least powerful of the group, it is still nothing to turn your nose up to.
What really makes this small sedan impressive is it safety, as Volvo continues its reign as one of the safest automakers on the planet.
Starting MSRP: $33,950
Standard automatic emergency braking
Incredible crash-test results
Well-equipped and peaceful cabin
Slower than the competition
Rides a little stiffer than expected
Iffy infotainment system
Lexus is back on the list for a second time with its IS sedan. While most buyers prefer the more powerful IS 350, the IS 300 and its 241-horsepower 2.0-liter engine is a nice No. 2.
The IS does excel in many areas, like acceleration and reliability, it struggles in some key areas, like owner satisfaction, braking, ride quality, and rear seat comfort, pushing it further down our list.
Starting MSRP: $37,825
Outstanding reliability for a luxury car
After-purchase customer service is among the best
Cramped interior that’s not easy to get in and out of
Horrific fuel economy
Remote Touch Interface is ridiculously difficult to use
Infiniti is another brand that’s come a long way in recent years, and the Q50 stands out as one of the best luxury cars on the cheaper end of the spectrum.
What helps push the Q50 up our list is that buyers can choose from the 2.0-liter turbocharged engine with 208 horsepower or the 3.0-liter turbo V-6 engine with 300 horsepower and still end up under out $40,000 limit. The latter powerplant makes this the quickest model on our list.
Starting MSRP: $34,200
Super-quick 0-to-60 time
Impressive handling and braking
Plenty of room inside
Controls are a bit overwhelming
Cabin isn’t very quiet
Subpar front-seat comfort