Best cars

Top 10 best luxury small cars 2021

The best luxury small cars are affordable and yet offer the kind of quality, comfort and equipment that used to only be found on large executive cars.

BMW 118 M Sport

When it comes to cars, luxury is often associated with size. High-end luxury saloons such as the Mercedes S-Class and Rolls-Royce Phantom are indeed very large, but there are still plenty of smaller cars that pack a lot of luxuriousness into their far more compact, and often more affordable, packages. Here, we’re looking at the very best small luxury cars on today’s market.

The idea of a small luxury car is an interesting one because one person’s idea of luxury may not be the same as someone else's. What we do know is that the car brands that make luxury or premium cars used to focus on larger models but that is no longer the case for all of them. One of the first cars to pave the way for the shift in the market towards small luxury cars was the Audi A3 - a family hatchback built to the same premium standards as Audi’s much larger executive cars. The A3’s popularity with buyers eventually caused rivals such as BMW and Mercedes to soon follow suit with the 1 Series and A-Class.

Top 10 best luxury cars 2021

Today, upmarket car brands offering models from right across the size spectrum is the norm. Premium family hatchbacks like Audi’s A3 and the Mercedes A-Class are hugely popular while Audi even offers the supermini sized A1 and BMW has the i3 electric car. There are compact SUVs in the same mould too, like the X1 from BMW, the Mercedes GLA or Audi’s Q2 and Q3. We’ve yet to see a compact Rolls-Royce or a bijou Bentley but the second tier premium brands are embracing the concept of relatively little cars with big car quality and technology - mainly because their customers like it.

As the luxury small car market has continued to grow, so have the expectations of customers. Rather than just a posh badge plus a few extra bells and whistles bolted onto a standard car, buyers of small premium cars now look for the full upmarket experience in terms of the products and the service attached. Seeing the success the premium German brands enjoyed by moving into the smaller end of the market, lots of mainstream manufacturers have taken steps to compete, launching premium sub-brands of their own - with varying degrees of success. The DS off-shoot of Citroen and Ford’s Vignale range are two of the best known but right across the small car market you’ll find models, or versions of models, that convincingly play the luxury card. 

And why should buyers take the plunge on a small luxury car? On the face of it, you pay a bit more and get a higher quality vehicle with nicer interior materials, possibly a more refined driving experience, and a better badge on the grille. There should be a bit more to it than that though. Thanks to the array of finance options available today, these high-spec cars are often more affordable than you might think. They tend to offer higher residual values too so you’ll have more value in the car at the end of your PCP finance deal or get a better part-exchange price when you come to move it on. The right small luxury car could even be a more cost effective bet than a model from a mainstream marque. 

Without further ado, here's our list of the top 10 best small luxury cars on the market right now. Once you’re finished, why not check out our list of the best car interiors or the best used small cars?

BMW 1 Series hatchback review

BMW 1 Series M Sport
Carbuyer rating

4.2 out of 5

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It’s hard to imagine a time when the 3 Series was the smallest BMW you could buy, such has been the success of the BMW 1 Series since the first version went on sale in 2004. Its popularity stems from the fact that it offers every quality that BMWs are renowned for, but in a compact and cost-effective form.

The 1 Series has always been regarded as a true driver’s car, and the switch from rear- to front-wheel drive shouldn’t change that for most customers - its chassis has been optimised to ensure it drives as well as a BMW should. Even the least expensive BMW 116i is a fun car to drive, but the M135i at the top of the range offers serious performance.

The 1 Series is a beautifully built and well equipped car, too, with every model having sat nav as standard. Its layout and excellent handling no longer comes at the cost of slightly cramped rear interior space, though it offers a little less comfort than the Audi A3 – but many find that the driving experience easily makes up for those shortcomings.

Audi A3 Sportback hatchback review

Audi A3 hatchback
Carbuyer rating

4.2 out of 5

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Audi had a considerable head start on its rivals when it came to introducing a more compact luxury car. Its close relationship with Volkswagen enabled it to use the Volkswagen Golf’s reliable and efficient mechanical package to underpin the A3 – a recipe that became an immediate success. To this day, the A3 combines the proven engines and chassis of the Golf with arresting good looks and an interior that exudes quality.

The A3 has a superlative finish and an aspirational aura, backed up by excellent comfort, technology, fuel economy and safety. If you prefer a big dose of speed, there is also the Audi RS3, which combines hatchback practicality with near-supercar pace. There’s also an assortment of economical diesels that are popular with company-car users and those who cover many motorway miles.

Mercedes A-Class hatchback review

Mercedes A-Class cornering
Carbuyer rating

4 out of 5

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The latest version of the Mercedes A-Class does everything better than its highly successful predecessor and provides stronger competition than ever to the Audi A3 and BMW 1 Series. The focus is on luxury and comfort rather than sporty handling, and while the latest A-Class is much better to drive than its predecessor, it’s inside where it races ahead of rivals. The dashboard in particular has a contemporary designer feel and is jam-packed with tech such as digital dials and standard twin seven-inch display screens (which can be bumped up to 10.25 inches at extra cost for a truly immersive infotainment experience).

Build quality is excellent, too, using suitably premium-feeling materials. Rear seat space is less generous than some, but there’s a decent boot to make up for it. While Audi and BMW offer more entertaining drives, the A-Class unashamedly puts relaxation to the fore. It’s a superb motorway cruiser, and refined, comfortable and easy to use everywhere else. The engine line-up is efficient, too, with almost 62mpg possible from the A180d diesel.

MINI Clubman estate

Carbuyer rating

4 out of 5

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When the iconic MINI name was reinvented by BMW at the beginning of the century, everybody knew that the resulting product would be a big hit. Nobody could have guessed, though, that it would spawn an entire range – every car in which has its own appeal that buyers can’t seem to get enough of.

The MINI Clubman itself offers the same irresistible blend of driver entertainment, charm and style as the standard hatchback, with endless customisation options. Entry-level versions can be more affordable than many people think, and there are so many engine and trim choices available that there really is a MINI for every taste and budget.

Volvo XC40 review

Volvo XC40 driving
Carbuyer rating

4 out of 5

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If you’re looking for a compact, luxurious car with a strong name behind it, the understated Volvo XC40 is a fine choice if you want to avoid looking ostentatious. It’s a very capable car with unbeatable safety, an extremely generous equipment list and an interior that exudes crisp Scandinavian style. On the negative side, the XC40’s driving experience is slightly forgettable, but it’s extremely comfortable and some of the diesel engines are very economical.

Volvo has been on a bit of a roll of late – we hold the Volvo V90 estate and Volvo XC90 SUV in high regard – and the badge is quickly increasing in appeal, while enjoying a less obviously assertive image than its premium rivals. The XC40 is a good looking car, inside and out, and you could say that this helps you stand out from the crowd while simultaneously not attracting too much attention to yourself.

Audi A1 hatchback review

Audi A1 hatchback
Carbuyer rating

4 out of 5

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The new Audi A1 offers all the brand’s traditional virtues of clean, subtle styling, unbeatable build quality and a classy interior distilled into a compact package, which still offers five doors. Handily, there’s noticeably more rear legroom in the new model, as that was a bugbear of the previous A1.

Thanks to the thoroughness of its design, though, the A1 is impressively quiet inside and makes a fine motorway cruiser, particularly due to its frugal yet powerful engines. These are well proven and reliable, being found under the bonnets of other cars in the VW Group. The A1 isn’t quite as rewarding to drive as a MINI, but excels in just about every other way.

Mazda3 hatchback review

Mazda3 hatchback
Carbuyer rating

4 out of 5

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You might not think of Mazda as a particularly upmarket brand but their recent cars have interiors that are really well-built, nicely finished and great to look at. All Mazda3s come with DAB radio, parking sensors and auto lights and wipers. The trim above base level, SE-L Lux, also comes with luxuries like heated seats, two-zone air conditioning and a reversing camera.

There are just two petrol engines to choose from, but the largest ‘SkyActiv-X’ option offers plenty of power and the economy of a diesel. There are no confusing driver settings either - Mazda thinks the car should be set up so that you can just get in and go. Practicality is a slight weakness; the back seats are a bit cramped, the boot is slightly smaller than rivals and the rear visibility isn’t great - but the same could be said for the previous BMW 1 Series and that was a popular car.

Lexus UX SUV review

Lexus UX SUV
Carbuyer rating

3.9 out of 5

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The Lexus UX is a great alternative to the usual German brands. It’s a small SUV with styling that’s just as sharp as Lexus’ bigger SUVs. You can only have the UX with a hybrid powertrain, so 50mpg is easily manageable and 0-62mph acceleration is dealt with in a fairly rapid 8.5 seconds.

The interior is beautifully made and offers a number of premium touches although, as with all Lexus models, the infotainment system is a bit fiddly and frustrating to use. Lexus leaves a lasting positive impression on many customers due to the cars’ reliability and a great dealership experience.

BMW i3 hatchback review

BMW i3 driving
Carbuyer rating

3.9 out of 5

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When BMW designed its first electric car, it decided on an ultra-futuristic design to set it apart from its petrol and diesel models. With its unconventional doors and tall shape, the i3 looks like nothing else on the road - and it only needed a minor update to keep it looking fresh. There’s now an i3s model that adds extra power and speed, but both are nippy and fun-to-drive, especially in town.

You’ll be able to travel up to 188 miles on a full charge and, from a 50kW public charger, recharging to 80% takes 42 minutes. It’s expensive but an appealing standard equipment list goes some way to justifying the price; sat nav, heated front seats, parking sensors, digital dials and DAB radio are all thrown in.

DS 3 Crossback SUV

Carbuyer rating

3.4 out of 5

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DS is the Stellantis luxury brand; the DS 3 Crossback is its version of a small, premium SUV, heavily based on the Peugeot 208 and Citroen C3 Aircross. As extreme makeovers go, though, it’s a very effective one, and the DS 3 Crossback is far better to drive and perhaps more interesting to look at than its less expensive Citroen sibling.

The colour schemes are bold and there’s a vast array of customisation options, allowing you to pick and mix your way to individuality. The interior is striking and you can tell that a lot of design time has been put into it – there are some extremely plush material finishes available, too. There’s an electric E-Tense version that isn’t too expensive after the £3,000 Government grant; it manages 200 miles of range and is quite nippy. Once again, the compromises are cramped back seats and a comparatively small boot, regardless of whether you pick electric, petrol or diesel.

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