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The SUV segment is one of the most popular segments in the American auto industry right now. Much of that has to do with automakers abandoning sedans in favor of SUVs. However, a bigger reason is simply that small SUVs are competing and beating sedans. This is true for luxury cars too, so here’s a look at three of the best luxury subcompact SUVs on the market.

3. Lexus UX

The 2022 Lexus UX was the third-best luxury subcompact SUV on MotorTrend‘s list. It’s somewhat unusual compared to its peers. It has a starting price tag of about $33,500, which undercuts most of its competitors by a small margin. However, the main selling point about the UX is under the hood. Rather than having a powerful engine, Lexus gave the UX some economical powertrains.

Its standard setup is a 2.0-liter four-cylinder with 169 hp and 151 lb-ft of torque. It’s paired to a CVT and gets front-wheel drive as standard. This gives the Lexus 29 mpg in the city and 37 mpg on highways, for 33 mpg combined. Additionally, owners can opt for the hybrid option. It comes with a similar engine, but it gets 181 hp and all-wheel drive. Its fuel economy also jumps to 41 mpg in the city and 38 mpg on highways, for 40 mpg combined.

However, there are several issues with this fuel-efficient Lexus. Although it has an upscale interior, the seats feel cramped. Furthermore, its ride quality isn’t great, and no matter which powertrain option it has, it will be a slow. 

2. BMW X1

A BMW X1, which is one of the best luxury subcompact SUVs.
BMW X1 xDrive23i | BMW Group

The 2022 BMW X1, on the other hand, narrowly beats the UX by being a very different car. It starts at about $35,400, but despite its price tag, BMW didn’t give it much in the way of luxury. Its interior feels cheap, and its interior design is “lackluster.” The good news is that BMW refreshed the X1’s interior for the 2023 model year.

Just like the Lexus, the best part about this BMW is also under the hood. The German automaker only offers one engine option for the X1, and it’s a 2.0-liter turbo four-cylinder engine that gets 228 hp and 258 lb-ft of torque. This gives it a respectable amount of power, and when combined with its responsive handling, it’s also a fun BMW to drive. 

Its fuel economy isn’t terrible either, as it gets 24 mpg in the city and 33 mpg on highways for 29 mpg combined. On top of that, it has a max cargo capacity of 59 cu-ft, which is above average for the segment.

1. Volvo XC40

The best subcompact luxury SUV is the 2023 Volvo XC40, which won because it’s a solid SUV overall. It starts at just over $36,000, which makes it slightly more expensive than the BMW or the Lexus. However, Volvo gave the car a great design, both on the exterior and interior. Its cabin could have higher-quality materials, but it’s still luxurious enough for most folks.

Volvo gave the XC40 two turbocharged four-cylinder engines, with one getting 194 hp and the other getting 247 hp. The 194-hp engine gets about 28 mpg combined, while the 247 hp option gets 27 mpg combined. On top of that, Volvo equipped the XC40 with many great tech features, including a 12.3-inch touchscreen display. Like most other great luxury SUVs, though, the XC40 simply has few flaws while being good in every area.