20 Best Affordable Luxury Cars for Less Than $40,000

A luxury car doesn't necessarily have to have a luxury price.

In November, the average cost of a new car was $35,870, according to Kelley Blue Book. The average luxury car ($57,399 on average) is more than double the cost of a compact SUV ($28,990). The cost of a high-end luxury car ($96,822) could buy a family a mid-sized commuter car ($25,510), a minivan ($35,621) and a subcompact car for their firstborn ($16,311) and leave them enough for a decent investment.

But the entry-level luxury vehicle is the great equalizer. An entry-level luxury car ($42,223) or compact SUV ($44,403) is only slightly more than the average electric vehicle ($39,447). Also, each is sold at a discount compared to the working-class, full-size pickup truck ($47,393).

If you've ever shopped at Neiman Marcus Last Call or Nordstrom Rack for high-end labels at low prices, you understand luxury automakers are doing with their entry-level offerings. The once entry-level Mercedes-Benz C-class and BMW 3 series have been supplanted by lower-tier vehicles. Why? Because those automakers could use the sales.

Luxury car sales dropped 7.2% through November, according to MotorIntelligence. That's compared to an 10.3% drop in the car market overall. The only luxury vehicles that received significant bump were luxury SUVs, which saw sales increase by a modest 3.4% year over year.

Those luxury automakers' struggles can be a less-flush car buyer's opportunity to step up to a cushier vehicle. With help from the folks at Kelly Blue Book we found 20 luxury vehicles that cost less than $40,000.

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Audi A3

Starting price: $31,950

The standard suite of Audi features, including Audi Connect capability information and entertainment services, make this a particularly good bargain at this price and mileage. Standard throw-ins include Xenon headlights with LED trim, dual-zone climate control, a panoramic sunroof, leather seats, HD Radio, SiriusXM satellite radio, Bluetooth, an SD card slot with 32 gigabytes of operating capacity and rain-sensing wipers and light-sensing headlights. Meanwhile, the A3's efficient-for-a-luxury-vehicle 28 miles per gallon is a fairly sweet perk of its own.

Audi Q3

Starting price: $32,900

Though a 200-horsepower 4-cylinder engine is a little underpowered for an Audi, and its Drive Select system to tighten or loosen the handling seems like overkill, it's the little perks that make it pop. An available 14-speaker Bose audio system, enhanced navigation that doubles as a Wi-Fi hotspot and sensor-driven parking and lane-assist systems are all nice options to have. However, the standard panoramic sunroof, 12-way heated leather seats and voice control system all give you Audi feel at a station-wagon price.

Acura TLX

Starting price: $33,000

Acura and its U.S. operations in Marysville, Ohio just know what the U.S. market wants, and this latest luxury take on the Honda Accord is a prime example. Insulated against sound, tricked out with LED lighting and loaded with automated safety features including lane assistance, adaptive cruise control, blind-spot warning and collision-mitigating braking, the TLX is a really cushy preview of what will eventually be Honda's self-driving car. There's a whole lot of American labor and ingenuity behind those advancements, but it's just a hint of what's to come. Oh, and if you get stuck with a four-cylinder instead of a V6, doesn't worry: That combined 30 miles per gallon -- including 35 mpg on the highway -- more than makes up for the lack of power.

Acura RDX

Starting price: $35,800

It's the luxury version of the Honda CR-V, which isn't a bad thing. The CR-V is Honday's best-selling SUV, and Honda-owned Acura loads it up to a 279-horsepower V6 engine, a multiview rear camera, keyless access, power tailgate and automatic climate control. It also offers GPS-linked climate control in the RDX's that communicates with a GPS-linked solar sensor that determines the position of the sun relative to the driver and passenger to tell your dual-zone climate control system then to keep the sunny side of the car as cool as the shaded side. Voice command, navigation, remote start, rain-sensing wipers and all-wheel drive are other options, but the 61 cubic feet of maximum cargo space is a big draw for families.


Starting price: $33,900

The X1 has a huge-for-a-luxury-compact 58.7 cubic feet of cargo space with the rear seats down. There's a heads-up display on the windshield, cornering LED headights, automatic climate control, power tailgate, BMW's telematics and infotainment system and lots of other perks built around a zippy 228 horsepower, four-cylinder twin turbo engine.

BMW 2 Series

Starting price: $34,800

The 2 Series may be the former the entry-level 3 Series' less-fortunate sibling, but it still has the same logo on the front. With a bit more plastic in the interior, a bit more petrochemical upholstery on the seats and just a 2.0-liter 4-cylinder, 240-horsepower turbo engine under the hood (albeit with 28.5 combined mpg), it's basically a baby step above the company's Mini badge. However, with its sport setting, stability control and performance suspension, this soft-top bargain BMW wants to give you all the fun of driving this brand at the cost of some of its more luxurious components. You still get the iDrive touchscreen computer system, rain-sensing wipers, automatic climate control and keyless ignition, but the satellite radio is extra, leather and wood are nonexistent and the more high-tech safety features are noticeably absent.

Buick Encore

Starting price: $22,990

Buick is really big on providing just enough luxury at a sub-premium price. The Encore is nearly a foot shorter than the Honda CR-V, but you can fold both the rear seats and front passenger seat flat for hauling cargo in its 48 cubic feet of space. The Encore's list of features includes available 4G LTE Wi-Fi, available dual climate control, power moon roof, rain sensing wipers, heated side mirrors, Bluetooth phone and audio connectivity, a rearview camera, split-folding rear seats, OnStar telematics and a six-speaker sound system with a CD player, satellite radio, a USB/iPod interface, an auxiliary audio jack and Buick's IntelliLink control interface with a 7-inch touchscreen and integrated smartphone apps. While Buick is a baby step beneath General Motors' big luxury brand, Cadillac, it still loves to pamper its customers.

Buick LaCrosse

Starting price: $29,565

When Buick first redesigned the bulbous, oversized LaCrosse back in 2009, it was a Big Deal. Buick loaded up on the plush amenities, but downgraded the engine from a V6 to a four-cylinder. Even that only succeeded in getting it a combined 23 miles per gallon until it introduced the semi-hybrid eAssist that manages 30.5. Seeing the one big area where the LaCrosse could improve, Buick upgraded it in 2015, put it on a lighter Chevy Impala platform. It may not be enough to keep the car from dropping out of Buick's SUV-heavy lineup in the future, but it's a fairly sweet deal for drivers who can still get one.

Cadillac ATS

Starting price: $35,495

The entry-level Caddy doesn't believe in sacrifice, even if GM might sacrifice it in favor of SUVs. The 2.5-liter version gets little more than 200 horsepower, but makes up for it with very un-Cadillac mileage. The 3.6-liter V6 doesn't break 28 miles per gallon, but it produces 335 horsepower and provides the muscle that a good Cadillac should -- complete with limited rear slip differential, magnetic ride control and magnesium paddle shifters. Technologically, the ATS is off to a good start with 4G Wi-Fi. With keyless entry and remote start via smartphone, a Bose sound system and the Cadillac CUE touchscreen console with voice feedback and wireless phone charging, it's loaded.

Chevrolet Volt

Starting price: $33,220

It's not only a more efficient plug-in hybrid than it's ever been, but it's about $10,000 less expensive than it used to be. The original Volt's all-electric range was a scant 35 miles and its gas mileage wasn't great either. However, its silent interior became the foundation for its 2016 redesign that adds more battery capacity, subtracts weight and goes a lot farther without gas. Not only is the sleeker body a welcome improvement, but the dual 8-inch LED color displays, Chevrolet MyLink apps system (with Apple CarPlay and Android Auto) all make the Volt feel less stuffy. Oh, and the 42.5 mpg from the gas motor and 53 miles of electric range don't hurt, either.

Infiniti QX30

Starting price: $29,950

There's a reason for the price: Even for a crossover, this is really small. There's a scant 34 cubic feet of total cargo space with the seats down and a body style that nominally resembles an SUV. However, the leather steering wheel, heated power rearview mirror, 208-horsepower four-cylinder engine, combined 28.5 miles per gallon, dual-zone automatic climate control, Bluetooth connectivity, backup camera and InFiniti InTouch infotainment system with 7-inch touchscreen all seem like lovely features... for a sedan.

Infiniti Q50

Starting price: $34,200

Introduced four years ago to replace the Infiniti G sedan, this is a more plush version of the tuner favorite Nissan Skyline. The top-of-the-line 3-liter V6 engine cranks out 399 horsepower, while even the hybrid version produces 359. Yet surrounding paddle shifters and sport gauges with a leather interior, wood-and-chrome trim, touchscreen apps systems, navigation and other baubles seem to distract this vehicle from its intended purpose: Laying rubber and taking names.

Jaguar XE

Starting price: $35,725

Jaguar vehicles have always leaned heavily on their looks, but it's the sporty handling that sells this low-end Jag. The push-button start, automatic dual-zone climate control, Bluetooth connectivity, HD radio and leather-wrapped steering wheel are somewhat plush, but the fact that a rearview camera, adaptive headlights, head-up display and automatic high beams cost extra suggest that Jaguar knows the line between "luxury" and luxurious.

Lexus NX 300h

Starting price: $38,335

A luxurious, hybrid version of the Toyota RAV4 seemed like a great idea at the time. Almost 18 cubic feet of cargo space, 36 inches of legroom in the back, a smartphone charger, LED lighting a remote touchpad to control your information and entertainment options also sounded fairly pleasant. However the NX 300h is fairly fortunate that its 33 mpg of combined mileage leads the class right now, since naysayers have noticed that there isn't a lot of hybrid competition for it in the luxury sector.

Lexus IS

Starting price: $36,210

The paddle-shift transmission, drive modes, 10.3-inch multimedia display, touch-based climate controls and Lexus Enform entertainment system all come at a premium over the similarly-designed Toyota Camry. That said, the base IS 300 produces 241 horsepower from its easily modified four-cylinder turbo engine and features performance driving modes and available all-wheel drive.

Lincoln MKZ

Starting price: $35,445

In 2017, Ford give this vehicle a honeycomb-chrome grill, Audi-style LED accent lights and a 3-liter, 400 horsepower engine to compete with Audi, Mercedes and BMW's entry-level vehicles. The MKZ's evolution has taken a solid first step, though the hybrid version's 40 mpg combined looks a lot better than the standard model's 24.

Mercedes-Benz CLA-class

Starting price: $32,700

Why would Mercedes drop a 2-liter 4-cylinder into a vehicle? To get 32 miles per gallon of combined highway and city mileage. The baby Benz produces just 208 horsepower of this baby Benz, but a 375-horsepower all-wheel drive version with sports suspension and racing brakes is available for more than our $40,000 limit. However, the touchscreen infotainment system with Bluetooth and HD radio, the smartphone app with five years of free features and the the radar-based collision, attention and braking assistance are strong standard features for an entry-level car.

Mercedes-Benz GLA-clas

Starting price: $32,850

From the chrome 18-inch rims to the 43.6 cubic feet of total cargo space and 28.5 miles to the gallon combined, the GLA-class combines luxury and utility. The 7-inch touchscreen display, Bluetooth audio streaming, five years of smartphone apps, Wi-Fi and streaming audio and automated collision, attention, blind-spot, lane-keeping and cruise-control assistance are all nice little features. However, the more than 200 horsepower and 30 miles per gallon make it a powerful, yet frugal choice.

Mini Clubman

Starting price: $24,100

Once just Mini's stretchy, gate-doored entry into the small car segment, the Clubman has bulked up a bit and added features including various upholstery options and the Mini Connected information and entertainment system with 6.5-inch high-resolution display, third-party app support, Bluetooth audio streaming and voice control. Mini's goal is to dazzle premium customers with a leather-wrapped three-spoke multifunction steering wheel and gearshift, dual-zone automatic climate control, rain-sensing windshield wipers, keyless ignition, 12-color ambient interior lighting, 60/40 split-folding rear seats, 16-inch alloy wheels, and carbon black leatherette upholstery. However, the biggest update is the choice of a BMW-developed three- or four-cylinder turbocharged engine, and with a six-speed manual or eight-speed automatic. BMW crammed 134 horsepower into the three-cylinder, while the four gets 189 horsepower.

Volvo V60

Starting price: $36,150

It looks like a wagon, but its combined 31 mpg are much more efficient than the wood-paneled wagons of the past. The 2-liter, 4-cylinder engine for the front-wheel drive model is the only version that gets anything close to this kind of mileage. The five-cylinder all-wheel-drive upgrade cuts combined mileage to less than 25 miles per gallon, but the base still gets you 43.8 cubic feet of cargo space, 3,500 pounds of towing capacity power driver's and front-passengers' seats, power moonroof and an audio and communications system with a 7-inch touchscreen.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.