NEW YORK (TheStreet) -- When you think VW Golf, you probably think of a very small car, cheaply built but engaging to drive. It was first launched in 1974 to replace the iconic VW Beetle.

You can now safely disregard your old views of the VW Golf. It's time to reprogram your brain. The all-new 2015 Golf is a far more sophisticated premium car with a relatively spacious interior compared to the competition.

The name Golf remains unchanged but behind the label it is now clear the all-new 2015 model has a lot more in common with the Volkswagen Group's (VLKAY) premium brands than ever before: Audi, Bentley, Lamborghini and Bugatti.

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For example, the 2015 VW Golf is built on the same platform as the all-new 2015 Audi A3 that hit U.S. dealerships little over a month ago. In Audi's case, the A3 comes reasonably well-equipped with leather interior, sunroof and a bunch of other goodies. The price starts at $29,900 plus destination and tax.

In Volkswagen's case, the Golf version with four doors and automatic transmission starts at $20,665 plus destination and tax, but even with all options it doesn't reach the Audi A3 sister car's base price. So that's one perspective: comparing the Golf with the base Audi for the U.S. market that's built on the same platform and has a similar engine.

The other dimensional perspective that's interesting in the case of the 2015 VW Golf is that this is the least expensive car in the U.S. market that's got an otherwise identical gasoline and diesel version of the same car. The diesel version of the car -- the so-called TDI -- starts at $23,095 with four doors and automatic transmission. Add all the options and you're right around $30,000.

The Golf was the original hatchback, and as such it's a very short car in relation to its interior space. The problem was that in the past the back seat was still a bit on the small side. Large for its class but not to be confused with a mid-size car.

Also See: The Cheapest 2014 Cars You'll Actually Want to Drive

This has changed completely for this all-new 2015 model. The rear seat is clearly the best in its class, with ease of ingress/egress, good foot space and perhaps most rarely found among many cars these days: great head space for a person little over 6 feet tall.

In contrast, the Golf's sister car, the Audi A3, has a smaller rear seat. You would not think that when just looking at these cars from the outside and judging from the relative marketing positioning.

Driver comfort is second to none in its class. Almost everything about it is best in class: front seat, steering wheel, foot space ("dead pedal"), seating position and instrumentation. Well, I give it a tie with the Chrysler 200 for instrumentation.

The all-new infotainment system has a relatively small 5.8-inch display with low resolution. From this perspective, it is far from best in class. However, I found it relatively easy to use, even compared to the Audi A3 sister car. Unlike the Audi, the VW is a touchscreen, which is inherently easier to master than a remote knob that you have to twist, bend and press.

All in all, when you sit in the driver's seat, you're both more comfortable and have a view of a far more rational instrumentation than every other car under $30,000 that comes to mind. This is extremely important because these are the touch points with which you interact as a driver constantly.

I drove the diesel version (TDI) against the gasoline version (TSI) back-to-back for almost half a day so as to compare the engines and get a glimpse of fuel economy. It quickly became clear the diesel is far superior to the gasoline version.

Most importantly, the diesel has so much more torque that the car doesn't downshift as much when you are accelerating. This means the ride is a lot less jerky. It's simply calmer. Another way of saying it is that it feel a lot more like an electric car -- although an electric is smoother still.

VW expects the gasoline version to be rated at 26 miles per gallon city, 36 mpg highway for the automatic transmission whereas the manual diesel should reach 31 mpg city and 42 mpg highway. In other words, a 5 to 6 mpg difference on paper.

In my driving, which was aggressive with constant burn-outs, I saw that difference more than double. The diesel performed approximately 12 to 13 mpg better than the gasoline car. Clearly I would need more time with the cars so say with greater certainty, but still.

If I understand VW's price list correctly, and accounting for equipment differences, depending on the trim level a diesel costs approximately $2,000 more than the gasoline version. If you drive 12,000 miles per year and achieve 40 miles per gallon instead of 30 mpg, you will have consumed 300 gallons of fuel instead of 400 gallons.

Let's say diesel is $4.50 per gallon = $1,350 per year.

Let's say gasoline is $4.00 per gallon = $1,600 per year.

That's a $250 annual savings. It would take you eight years to pay off the higher purchase price, not counting opportunity cost of capital. However, the diesel's resale value may be greater, there are no spark plugs to worry about and, most important, the diesel drives a lot better.

That last fact -- that the diesel drives better -- is what it's really all about, unless you drive a lot of miles beyond the society-wide average of 12,000 per year, at which point you're going to obviously earn back the higher purchase price faster. People pay up for a better engine all the time. In this context, an extra $2,000 is totally reasonable.

An interesting point is this all-new 2015 diesel engine creates 40% less pollution than the previous 2014 VW Golf diesel, and it already meets the 2018 emissions regulations. Think about that for a minute: 40% less pollution.

This should infuse some perspective of the debate on automobile emissions. We are spending a fortune to get less than 1% of the population to buy very expensive and often impractical electric cars. At the same time, Volkswagen is achieving a 40% reduction in emissions just from the 2014 VW Golf diesel to the 2015 model.

The cars on the road today are, on average, more than a decade old, not 2014 models. Imagine the improvement if everyone traded in their existing car for a 2015 VW Golf diesel. A 40% improvement in one year, magnified over a decade, basically means you quickly start to approach a 99% reduction in pollution.

Instead, we are spending a fortune trying to shoehorn 1% of the population into very expensive electric cars. That is a very expensive waste compared with the improvement we could achieve with a zero-compromise, go-anywhere, 2015 VW Golf diesel. We could fix close to 99% of the automobile emissions problem on the road today with a sub-$25,000 car instead of achieving -- at best -- a 1% improvement with tiny sales of electric cars.

In conclusion, I give the all-new 2015 VW Golf TDI my highest recommendation: It's a car that's small on the outside, big on the inside, has a new upscale interior, drives supremely well and, if bought in bulk to replace the existing cumulative U.S. car fleet, could reduce automobile pollution by up to 99%.

It starts under $25,000. Do it now. Do it for the children.

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

>>Read more: Volkswagen Launches the People's Electric Car

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