Car Buying Tips

5 Best Compact Luxury Cars to Consider in 2023

If you appreciate the way upscale automakers focus on sharp handling and exciting performance, we’d argue there’s no better way to enjoy those characteristics than in a compact luxury car. Crossovers may be all the rage, but it’s hard to beat a compact car’s lower centre of gravity if driver engagement is more important to you than an SUV’s interior flexibility.

For the 2023 AutoTrader Awards, our jury of more than 20 expert auto reviewers considered every single vehicle in this segment and voted on the ones they thought best exemplified what makes the segment special. Unsurprisingly, most of them come from Germany – the country whose automakers created this vehicle segment and still dominate it – but South Korea’s Genesis brand is keen on stealing the German auto industry’s thunder. Electrification is also reshaping the compact luxury car class just as it is other premium segments.

With those two disruptive forces in mind, here’s how the Best Compact Luxury Car category shook out once our jurors had cast their votes. These cars represent the finalists in the 2023 AutoTrader Awards.

2023 BMW i4

For the first time in the history of the AutoTrader Awards, an electric car won the Best Compact Luxury Car category.

Until 2021, BMW’s only fully electric model was the weird i3, and then the i4 came along in 2022 with way more range, far better looks, and performance that actually fits BMW’s sport sedan image. In fact, the i4 is so well executed that it ousted the Genesis G70 from top spot in this category – an especially big deal given the G70 won the Best Overall Car prize in the 2021 AutoTrader Awards.

Editor-in-Chief Jodi Lai took the wheel of the i4 in summer 2022 to see what all the fuss was about. She praised the i4’s performance, which “feels balanced and . . . sticks to the road while diving through corners,” which can be attributed to the car’s lower centre of gravity compared to the 4 Series Gran Coupe, thanks to the weight of its battery pack. And with 355 hp on tap from her eDrive40 tester’s rear-mounted electric motor, she said “passing and merging onto the highway is a breeze.”

Lai surmised that familiarity was almost certainly behind BMW’s decision to base the i4 on the 4 Series, writing that, “The i4 looks, feels, and operates just like any other BMW, so . . . there is very little learning curve to get used to it.” She liked that the iDrive infotainment system responds via touchscreen and the dial on the console, “which is easier and less distracting to use while the car is in motion.”

Because it shares its body and some structural elements with the 4 Series Gran Coupe, the i4 has a spacious hatchback cargo area. But as Lai pointed out, that approach has its downsides: There’s no “frunk” and there’s a space-hogging driveshaft tunnel running through the middle of the cabin, even though the i4 doesn’t have a driveshaft.

Also, BMW charges extra for many of the i4’s desirable features, but that’s hardly new for this upscale German brand.

Since Lai drove the 2022 i4 eDrive40 test car, BMW added a less expensive and less powerful eDrive35 model to the lineup for 2023, with 282 hp and priced at $54,990. The eDrive40 and its 335 hp go for $61,390, while the top-line all-wheel drive M50 gets 536 hp and retails for $77,500.

2023 Genesis G70

If you’ll pardon our use of a trendy term, the Genesis G70 is a disruptor in a field of established compact luxury sedans. It won last year’s Best Compact Luxury Car award and the Best Overall Car award the year before that. And in 2019 – its first year on the market – it was named North American Car of the Year, a prestigious prize voted on by automotive journalists from all over Canada, the United States, and Mexico.

How did this upscale compact Korean come out of nowhere and start winning awards? For one thing, it’s an excellent value, but it’s also just a really good car.

Editor-in-Chief Jodi Lai drove the refreshed 2022 model, which draped significantly updated styling over the car’s existing platform and powertrains. She wrote that she appreciated “the uniqueness of the design,” and felt its “rear end is a design triumph.”

Her G70 3.3T Sport test car had a turbocharged V6, a powerful offering that Genesis improved by making it sound better with a variable exhaust system. To Lai, that only enhanced “how confident and natural the car feels when driven like you’re in charge of the getaway.”

She also felt the G70 3.3T Sport felt “less artificial” than the BMW M340i – a notable accomplishment for Genesis’s engineers.

From a practical point of view, Lai appreciated the dashboard’s ease of use, including the new-for-2022 10.25-inch touchscreen. Where the G70 falls down is in its small, 297L trunk: the BMW 3 Series for example, can pack in nearly 60 per cent more cargo. She also found the rear seat tight.

In the end, Lai concluded that while many of Genesis’s competitors have dealbreakers, “the G70 has none,” adding that it’s “an excellent car, period, even when compared to established rivals.”

Genesis G70 pricing starts at $47,000 in a 2.0T Select AWD trim powered by a 252-hp, 2.0L turbo four-cylinder engine. The 2023 version of Jodi Lai’s 3.3T Sport AWD is the top-line model, coming in at $61,000 with its 368-hp, 3.3L turbo V6.

2023 BMW 3 Series/4 Series

Small sedans and coupes are not the luxury-car leaders they once were, but the BMW 3 Series and 4 Series models remain touchstones of the upscale vehicle marketplace. BMW rolled out the seventh-generation 3 Series in 2019 and gave it a major refresh for 2023 with updated styling and new driver info and infotainment screens. On the 4 Series side of the equation, an all-new generation arrived in 2021.

BMW’s compacts used to be some of the most desirable drivers’ cars, but how do the latest versions live up to that reputation?

As Jeff Wilson discovered when he tested the new 2023 model in 382-hp M340i trim, “It’s at highway speeds that BMW’s Autobahn breeding comes to light, with the M340i able to swallow vast expanses of desert asphalt that can surprise the driver, making cruise control a useful tool for preserving one’s licence.” He also took the M340i around an autocross course that revealed “its quick, precise (if somewhat numb-feeling) steering,” eventually concluding that while “the 3 Series has grown significantly over the generations . . . it’s still got moves.”

Power-wise, Wilson said it’s the 369 lb-ft of torque from the M340i’s 3.0L turbo inline-six “that provides gobs of thrust to generate the real excitement . . . backed by a delicious snarl and growling exhaust note.” Note that some of that engine’s thrust also comes from a 48-volt electrical system that provides mild hybrid electric assist during acceleration.

Among the aspects of the M340i Wilson liked less were how the bigger touchscreen eliminates many of the older car’s hard buttons, and its price, which added up to more than $78,000 with options.

Sami Haj-Assaad noted that one of the main differences between the 3 Series and the 4 Series Gran Coupe is that the latter has less rear-seat headroom, owing to its shapelier roofline. And in his first drive of the newest 4 Series Coupe in 2021, Haj-Assaad described it as “8 Series outside, 3 Series inside,” referencing BMW’s 8 Series prestige model.

Both the 3 Series and 4 Series start in a 330i/430i trim powered by a 255-hp 2.0L turbo four-cylinder engine. Benjamin Hunting reviewed a 2019 330i, of which he wrote “you’d be hard-pressed to peg the unit as a four-cylinder based on how readily it responds to your right foot.”

Hunting also called out his 3 Series test car’s price, which included $12,000 worth of options on top of its then-$49,000 base price, citing BMW’s expensive extras as one of the reasons the Genesis G70 has been so well-received in the marketplace.

BMW’s 3 Series and 4 Series pricing starts at $54,250 for the 430i and $55,000 for the 330i. There’s also a 330e plug-in hybrid that goes for $58,900. The M440i starts at $67,400 and the M340i carries a $68,000 price tag. Finally, there are 430i and M440i convertible models that go for $64,900 and $77,400, respectively.

2023 Mercedes-Benz C-Class

Mercedes-Benz redesigned its C-Class compact into an all-new generation in 2022, and the 2023 model is carried over from that. It was the first car to get Benz’s 48-volt mild hybrid technology which, when built into the C 300’s 2.0L turbo four-cylinder powertrain, contributes 20 hp and 147 lb-ft of torque to boost acceleration beyond the engine’s 255 hp and 295 lb-ft. Mercedes also uses its mild hybrid tech in the speedier AMG C 43 sedan, where it helps generate 402 hp and 369 lb-ft from the 2.0L turbo.

If you’re shopping for a C-Class coupe or convertible, be aware that those cars use older, non-hybrid powertrains: The C 300 gets the 2.0L on its own, while C 43 models get a 3.0L turbo V6 with 385 hp and 384 lb-ft.

The C-Class remains a formidable competitor in this class, thanks to its modern powertrains and a cabin that combines high-tech interfaces with plush comfort and could be mistaken for the inside of the big S-Class at a glance.

2023 Mercedes-Benz C-Class pricing starts at $54,700 for the C 300 coupe and $58,600 for the C 300 sedan. The convertible rings in at $63,000. The top option is the AMG C 43 sedan at $80,900.

2023 Lexus IS

In 2021, Lexus applied fresh styling and a few functional tweaks to its third-generation IS, a compact sport sedan that enjoyed its last full redesign in 2014. Structurally speaking, that makes it the oldest design on this list, but it’s a testament to the IS’s goodness that it’s still Best Compact Luxury Sedan finalist material.

Sami Haj-Assaad started his first drive review of the 2021 Lexus IS by commenting on its improved infotainment system, which included a then-new touchscreen to reduce reliance on the previous car’s unloved touchpad system. He’s of two minds about the wealth of hard buttons on the IS’s centre stack, “which can be a bit overwhelming at first; but fortunately, Lexus doesn’t hide any functions in the submenus of its infotainment system.”

Behind the wheel, Haj-Assaad’s first impression was one of confidence. “The steering requires effort, far from the numb steering feel found throughout the industry … the overall feeling is still one of quality, something that feels solid under your command.”

Peter Bleakney put a 2021 Lexus IS 300 AWD through a full week-long test and praised the automaker’s efforts to improve ride quality by strengthening the car’s structure and lightening some suspension pieces.

“This all adds up to a car that glides easily and quietly over the road … the IS 300 AWD feels every inch a Lexus, delivering an impressively refined and compliant ride.” Bleakney also appreciated the IS’s comfortable seats, which were “trimmed in a convincingly soft and supple faux leather,” and gushed about the cabin’s “jewel-like build quality” that he said prompted a passenger to compare the interior to a Bentley.

But Bleakney found downsides as well, like the 311L trunk, which gives up a lot of capacity to the 3 Series; and while his tester’s quick-revving 260-hp V6 provided adequate power, it felt “flat-footed … when looking for passing or merging power.”

If you want more power, you can get it in the V8-powered IS 500 Lexus added in 2022. Bleakney reviewed that one, too, and called the 472-hp engine “a honey, delivering its urge in a linear and scintillating rush.” He also liked the high-tech suspension, which he said gave the IS 500 “a fluid and highly refined feel when unravelling a winding road.”

2023 Lexus IS pricing starts at $47,815 for the IS 300 RWD and its turbo four-cylinder engine. The IS 300 AWD’s V6 is a few hundred dollars more. The 311-hp IS 350 AWD comes in at $57,465, and the IS 500 $77,265.