BMW 1 Series review – the keen driver’s premium hatchback pick
The best luxury small cars to buy in 2025
Fancy a slice of the high life but don’t want to break the bank? These luxury small cars could be for you
Small luxury cars have become hugely popular in the UK, and it’s easy to see why. You can have a slice of the premium motoring experience without the high price tag you’d normally associate with a brand like BMW, Audi or Mercedes. Plus, their smaller size makes them easier to weave through city streets and along narrow country lanes.
But why choose a small luxury car over a regular hatchback or a larger executive car? For many car buyers, they strike the perfect balance between style and substance. You get the prestige of a premium badge and upmarket looks, but in a package that’s easier to park, more efficient to run, and just as well-equipped on the inside. Plus, many small luxury cars get the same tech found in their bigger siblings these days, including digital driver’s displays, heated seats, premium sound systems and more.
Without further ado, here's our list of the top 10 best small luxury cars on the market right now. We’ve also covered the 10 best small cars for those less concerned about luxury, while our list of the best small electric cars will cater to those wanting to switch to zero emissions.
- Priced from around £31,000
The BMW 1 Series has been at the forefront of the small luxury car market since it launched in 2004. The latest generation – introduced in 2019 and heavily updated in 2024 – is the most premium yet, offering a similar interior and driving experience to many of BMW’s pricier models.
BMWs have always been regarded as true driver’s cars, but some were worried when the 1 Series changed from rear to front-wheel drive for the current generation. However, its chassis has been optimised to ensure it drives as well as a BMW should, feeling almost as refined as a full-size luxury car but without compromising sportiness. Even the least expensive BMW 120 is a fun car to drive, but the M135 at the top of the range offers serious performance.
As expected, the 1 Series is a beautifully built and well-equipped car, too, with every model getting BMW’s dual-screen iDrive setup as standard. Most buyers will spring for the M Sport version, which gets larger alloy wheels, coloured stitching and a sports leather steering wheel for an even more premium feel. Even though the 1 Series costs around £3,000 more than an entry-level Volkswagen Golf, it feels leagues ahead in terms of quality, so that premium will be worth paying for many car buyers.
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- Priced from around £30,000
Audi had a considerable head start on its rivals when it came to introducing a more compact luxury car. The Germans brand’s close relationship with Volkswagen enabled it to use the 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 is backed up by excellent comfort, technology, fuel economy and safety. A particular interior highlight is Audi’s Virtual Cockpit, which was one of the first fully digital driver displays to hit the mainstream, while the plug-in hybrid A3 is capable of up to 88 miles of electric driving – one of the longest ranges on the market. If you prefer a big dose of speed, there is also the Audi RS 3, which combines hatchback practicality with near-supercar pace.
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- Priced from around £31,000
The Mercedes A-Class completes the trio of premium German hatchbacks, and the latest version does everything better than its highly successful predecessors. The current model has been on sale since 2018, so it’s older than both the 1 Series and A3, but it still feels fresh on the inside thanks to high quality materials and its crisp dual-screen setup.
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. None of the engine options are particularly inspiring – unless you opt for an AMG model – but at least they’re efficient and the dual-clutch automatic gearbox shifts smoothly.
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. But it’s the interior design that’s likely to win over small luxury car buyers – from the illuminating air vents to the leather steering wheel, it wouldn’t look out of place in the bigger C-Class or E-Class saloons.
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- Priced from around £36,000
If you’re looking for a small, luxurious SUV 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 a strong safety record, a 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 you have the option of a mild hybrid, plug-in hybrid, or a fully electric version with the EX40.
Volvo has been on a bit of a roll of late – we hold the Volvo V90 estate and Volvo XC90 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.
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- Priced from around £24,000
You might not think of Mazda as a particularly luxurious brand, but their recent cars have interiors that are surprisingly well-built, nicely finished and great to look at. The Japanese brand has focused on material quality rather than fitting its cars with giant screens – a decision that we think many car buyers will appreciate. The result is a relaxing, easy to operate interior that’s well put together with enough tech to keep most buyers satisfied.
All Mazda3s come with a head-up display, adaptive cruise control, Apple CarPlay and Android Auto, parking sensors and automatic lights and wipers. Top-spec Takumi models are still more affordable than the entry-level German hatches above, and they get leather upholstery, a heated steering wheel, a 360-degree parking camera and more.
There are just two petrol engines to choose from, but the mild hybrid ‘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.
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- Priced from around £23,000
MINI’s iconic city car has slowly shifted upmarket in recent years, and the new model is the most luxurious yet. It’s still a small car – the smallest on this list, in fact – yet it packs tons of tech into a really unique cabin. Climb into the Cooper for the first time and it’s pretty clear that it sits in a different league to other city cars – the use of high quality materials and that circular touchscreen feel really special.
Opting for the fully-electric Cooper E gets you a brilliant small EV with plenty of power and enough range for most scenarios. The silent operation of the electric motors adds to the premium experience, although the ride is on the firm side. Then again, you can save nearly £7,000 by going for the petrol-powered Cooper – it’s based on an older platform under the skin, but the interior is identical and it’s even more agile through the corners.
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- Priced from around £33,000 (approx.)
When the all-new Renault 5 was revealed last year, it was meant to reignite the small, affordable car market with a new sense of style. We reckon Renault’s onto a winner, but the Alpine A290 builds on the same platform with an extra dose of sportiness and a new upmarket appeal. Everything about the Alpine feels a bit more special, from the driving experience to the cabin, not to mention that it will undoubtedly be more exclusive than its Renault counterpart.
The Alpine A290 does everything a small electric car should do. It’s easy to park, has a decent range, and even more boot space than you’d expect. But it earns a spot on this list with its attractive, well-built interior and its excellent driving experience. The cabin layout is essentially the same as the Renault 5, but you get different materials and trim, some sportier seats and the gear selector buttons from the Alpine A110 sports car. The big blue ‘A’ badge and toggle switches on the steering wheel feel fit for a supercar, let alone a supermini. Equipment is strong, too, so the A290 is well worth considering for its luxuriousness as well as its sportiness.
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- Priced from around £30,000
The Audi Q2 may be approaching a decade old, but there are still few small SUVs that can match it for quality. You get that chiselled, grown up look that Audi buyers love, along with a really smart cabin that feels rock solid. Sure, the infotainment tech may be a generation behind Audi’s latest and greatest, but it still does the trick and the Virtual Cockpit is slick. We also appreciate the old-school physical controls for the climate settings, which are easy to use on the move.
There are two petrol engines to pick from, and even the entry-level 1.0-litre unit has enough poke to get the Q2 up to speed without much hassle. A manual gearbox is still the standard offering, so you’ll need to upgrade to the top-spec engine for an automatic. Both work equally well, though, and complement the Q2’s hatchback-like driving experience. It’s more enjoyable to drive than cheaper SUVs like the Renault Captur and Peugeot 2008, although the ride can be a bit firm. For those who want a small SUV with a premium cabin and unmatched badge appeal, the Q2 will be money well spent.
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- Priced from around £32,000
Smart cars have historically appeared on plenty of ‘small car’ best lists, but you’d have been hard pressed to find any mention of luxury. That’s all changed with this new generation of electric Smarts, which started with the small #1 SUV. Partially developed by Chinese firm Geely, the Smart #1 combines a relaxed EV driving experience with a high quality interior. It’s much bigger than Smart’s old city cars, but it now has plenty of room for four passengers without being much larger than a Nissan Juke.
The cabin design certainly looks the part, with an attractive dashboard and a pair of digital displays. It’s a shame that the software is a bit frustrating to use – it’s probably the #1’s biggest downside – but at least material quality is generally good. We appreciate touches like the soft pad to rest your knee under the dashboard and the standard-fit 360-degree camera, keyless entry and heated seats. Other upgrades like the leather seats, head-up display and extra ambient lighting add to the luxurious experience.
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- Priced from around £30,000
Lexus is a brand that has always exuded quality. The LBX is currently its smallest car in the lineup, and while we don't think it’s quite as successful as its bigger models, it’s still worth considering if you want a small luxury SUV. It shares its platform and engines with the Toyota Yaris Cross, so it’s just as efficient and reliable as you’d expect. Importantly, Lexus has focused on refining the driving experience, so the LBX feels composed, quiet and comfortable on the motorway.
The interior is where you’ll notice the biggest change over its Toyota cousin. It’s a simple but attractive cabin design, with a mixture of high quality materials and all the standard equipment you could need. There’s a big central touchscreen which is easy to use, but it’s supplemented by physical climate controls. These feel very robust, along with all the other controls you interact with, giving the illusion that you’re sitting in a much more expensive car.
Downsides? Well, the LBX isn’t the most spacious car on this list and it’s not very exciting to drive. It’s also nearly £5,000 more expensive than a Toyota Yaris Cross, which sounds like quite a lot considering it’s essentially the same car underneath. But then again, it’s no more expensive than the other cars on this list and feels like one of the most upmarket options.
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Luxury small cars: price and score table
| Best luxury small car ranking | Make and model | Priced from | Carbuyer rating (out of 5) |
| 1 | BMW 1 Series | £31,000 | 4.2 |
| 2 | Audi A3 | £30,000 | 4.2 |
| 3 | Mercedes A-Class | £31,000 | 4.0 |
| 4 | Volvo XC40 | £36,000 | 4.0 |
| 5 | Mazda 3 | £24,000 | 4.0 |
| 6 | MINI Cooper | £23,000 | 4.0 |
| 7 | Alpine A290 | £33,000 | 4.0 |
| 8 | Audi Q2 | £30,000 | 4.0 |
| 9 | Smart #1 | £32,000 | 3.9 |
| 10 | Lexus LBX | £30,000 | 3.8 |
Small luxury car history and buying advice
The idea of a car mixing economy with luxury sounds great, but not everyone has the same view of what luxury really is. However, it has become clear that taking the essence of a manufacturer's most expensive vehicle and applying it to its smaller cars has won an audience that wants a premium feel without the price.
One of the first vehicles to successfully prove the concept was the Audi A3, first released in 1997. Audi applied its high-quality build standards and top-notch materials to a small luxury city car without making leather or a premium sound system standard, as would be expected on the luxury Audi A8. The family hatchback became a sales success for car buyers after a luxury car for daily use, and the BMW 1 Series and Mercedes A-Class quickly followed.
Today there are even compact SUVs in the same mould, such as the BMW X1, the Mercedes GLA or Audi’s Q2 and Q3.
As the luxury small car market has continued to grow, so have the expectations of customers. Buyers of small premium cars now look for the 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.
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. 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 end up being a more cost-effective bet than a model from a mainstream marque.
Willing to spend a bit more? Read our list of the best luxury cars…
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