10 Best Luxury Cars Under $40k for 2016

2016 Cadillac ATS 2.0T on road ・ Photo by Cadillac Media

The list of luxury cars under $40k has grown by leaps and bounds over the past few years as premium brands scramble to squeeze in smaller, more affordable options at the entry level of their lineups. These new models join the existing cadre of compact and mid-size luxury cars that balance a reasonable price point with upscale features and classy styling. There's really never been a better time to get a good deal on a premium car, whether you're looking to Japan, Europe, or right in here in America for inspiration. Let's take a look at 10 of the best luxury cars under $40k for 2016.

1) 2016 Buick Regal GS

The 2016 Buick Regal GS proves that you can have fun in a luxury car under $40k without having to make any sacrifices in comfort. The Buick Regal GS boasts a 2.0-liter turbocharged four-cylinder engine that pushes out 259 horsepower and 295 lb-ft of torque to either the front or all four wheels (if optional all-wheel drive is selected). Transmission choices include a six-speed manual (front-wheel drive-only) and a six-speed automatic, and the car features an adaptive suspension system and some of the sleekest looks in the GM portfolio. The GS also happens to boast one of the most complete feature sets of all of the cars on our list to go with its high performance character.

Photo by Buick

2) 2016 Acura TLX 3.5

The 2016 Acura TLX 3.5 benefits from the luxury sedan's most powerful engine option - a 290-horsepower, 3.5-liter V-6 that is also good for 267 lb-ft of torque - and pairs it with a nine-speed automatic transmission. You'll have to settle for front-wheel drive to squeak in under the $40k mark with the Acura TLX 3.5, but you can spring for the Technology package and still make the cut. This means outfitting the TLX with a long list of advanced safety features as well as a navigation system, leather upholstery, and an upgraded audio system.

Photo by Acura

3) 2016 Infiniti Q50

The 2016 Infiniti Q50 is another six-cylinder luxury car under $40k, but unlike the TLX, it takes things in a decidedly sportier direction. With a rear-wheel drive chassis that has been developed in conjunction with Nissan's sporty 370Z coupe, the Infiniti Q50 offers above-average dynamics when driven hard, while still preserving a smooth and comfortable ride when commuting. The Q50's 3.7-liter V-6 is good for 328 horsepower and 269 lb-ft of torque, and it's matched with a seven-speed automatic transmission. Standard gear with the Infiniti includes LED headlights, dual automatic climate control, and a touchscreen infotainment system.

Photo by Infiniti Media

4) 2016 Lexus ES 350

The 2016 Lexus ES 350 is the perfect luxury sedan for drivers who simply want to relax and be coddled out on the road. With no sporting pretensions, the Lexus ES 350's suspension system has been tuned to absorb even the harshest road insults, and its cabin is well insulated against the outside world to create a quiet rolling refuge. 268 horsepower and 248 lb-ft of torque are generated by the Lexus' 3.5-liter V-6, and the car features a six-speed automatic transmission sending that output to its front wheels. A respectable list of features available on all ES 350s shows a sunroof, Bluetooth connectivity, LED headlights, and the Safety Connect telematics system as highlights.

Photo by Lexus

5) 2016 Audi S3

The 2016 Audi A3 proves that going small can sometimes be just as rewarding as going big. The Audi A3 shrinks the brand's popular luxury formula, featuring a 2.0-liter turbocharged four-cylinder engine that produces 220 horsepower and 258 lb-ft of torque even when spending less than $40k, matched with a six-speed dual-clutch automated manual transmission and standard all-wheel drive. Lighter than its larger Audi lineup mates, the A3 is notable for its fun-to-drive character in addition to its inexpensive price point. If you can handle the somewhat cramped rear seat of the S3, it's an intriguing entry-level premium choice.

Photo by Audi Media Services

6) 2016 Cadillac ATS 2.0T

The 2016 Cadillac ATS is the first compact sedan from the domestic automaker to go head to head with BMW and Audi and not suffer from the comparison. It's possible to step up to the mid-tier 2.0-liter Cadillac ATS with its turbocharged four-cylinder engine without breaking our self-imposed $40k price ceiling, which means you'll get to enjoy 272 horsepower and 295 lb-ft of torque along with the choice of either a six-speed manual (rear-wheel drive models) or six-speed automatic (rear- and all-wheel drive editions) transmission. You also get genuine leather upholstery, Bluetooth streaming and phone connectivity, and wireless charging of mobile devices with the affordable edition of the ATS.

Photo by General Motors

7) 2016 Mercedes-Benz C300

Keeping the 2016 Mercedes-Benz C300 under $40k is an exercise in restraint, because like most of its German rivals, it offers a slew of options and packages that quickly inflate its sticker price. Stick with the base version of the Mercedes-Benz C300 and you'll enjoy features such as power adjustable front seats, dual automatic climate control, leatherette upholstery, and the COMAND infotainment system - but most of the high end electronic gear will require a bigger spend. Under the hood, the rear-wheel drive C300 offers a 241-horsepower, 2.0-liter turbocharged engine that's also capable of producing 273 lb-ft of torque. A seven-speed automatic transmission is standard across the board with the C-Class.

Photo by Mercedes-Benz Media

8) 2016 Audi A4

The 2016 Audi A4 offers a smoother ride than the subcompact A3, and also considerably more space inside for passengers at all five seating positions to stretch their legs. The Audi A4 provides a sunroof, three zones of automatic climate control, HID headlights, the MMI infotainment system, and leather upholstery even at the entry level, and all models are motivated by the same 2.0-liter turbocharged four-cylinder engine as the A3 (which means 220 horsepower and 258 lb-ft of torque). You can add all-wheel drive to the A4 mix and keep the price under $40k, which also means you get to choose between either a six-speed manual transmission or an eight-speed automatic.

Photo by Audi Media Services

9) 2016 BMW 328i

The 2016 BMW 328i is a worthwhile upgrade over the base BMW 320i, for though both feature turbocharged, 2.0-liter four-cylinder engines, the former's 240 horsepower and 255 lb-ft of torque significantly transform the driving experience from palatable to just above average. It also helps that the BMW has one of the more enjoyable suspension setups in its class, helping to lure in enthusiasts shopping for a luxury car under $40k. A six-speed manual stirs the pot for sportier fun, while an eight-speed automatic is also available with the car, and standard equipment for the BMW 328i includes dual automatic climate control, Bluetooth connectivity, the iDrive infotainment and communications interface, and a push button starter.

Photo by BMW

10) 2016 Hyundai Genesis

The 2016 Hyundai Genesis is the only full-size luxury car under $40k to make our list, but don't think for a second that it stripped down to its skivvies to fit under the cut. The base Hyundai Genesis offers leather upholstery, a navigation system, Bluetooth connectivity, automatic climate control, 18-inch wheels, the Blue Link telematics system, and a touchscreen infotainment system, and it's motivated by a 3.8-liter V-6. This unit has been tuned to provide 311 horsepower and 293 lb-ft of torque, and it's matched with an eight-speed automatic transmission.