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  • The 2022 Honda Civic Si is a great Type R replacement for less
  • A Volkswagen GTI is the obvious choice under $40,000
  • Buy an E46 BMW M3 and make money

Let’s play a game. Say you’ve got $40,000 to spend on a sports car (or hot hatch) that you’ve got to drive every day. The Honda Civic Type R is clearly the answer, right? Truthfully, the Type R’s looks and vibe may not be for everyone, and the 2023 model’s more subtle looks aren’t available to purchase. So, what do you buy?

A white Honda Civic Type R shot from the front 3/4
The Honda Civic Type R is unquestionably the best FWD car out there | Honda

Is the Volkswagen GTI better than a Honda Civic Type R?

The Honda Civic Type R's main competitor, the Volkswagen GTI, shot in profile with Cornflower Blue paint
The GTI is the Type R’s biggest competitor | Honda

Forget “Miata is always the answer.” If you need a hatchback that isn’t a Honda Civic Type R for under $40k, you’re spoiled for choice with a new or used Volkswagen GTI. Honestly, your best bet is to go out and buy the nicest one you can, then use the leftover cash to find the best snow tires you can. Oh, and pair the 220+ hp four-pot with a manual transmission for maximum fun.

The 2022 Honda Civic Si is a cheap Type R that’s almost as good

An orange 2022 Honda Civic Si, the Honda Civic Type R's sibling car, shot from the front 3/4 on a highway
The Civic Si is the almost Type R | Honda

However, if German sports cars and hot hatches aren’t your thing, the 2022 Honda Civic Si might be. The most recent iteration of the Civic Si might actually be better than the Type R for $10,000 less. Not only does it fit our imaginary $40,000 budget, but the Si is also a new car with a warranty. Trust us, 200 hp is more than enough to dice up your favorite back road, especially when you’ve got the Si’s phenomenal stick shift in your hand.

A used Audi S4 is a great AWD sports car bargain

A white Audi S4 sedan shot from the front 3/4 at sunset
The Type R is so good we had to look at used Audis to find some competition | Christopher Evans via Getty Images

The Honda Civic Type R is many things, but a luxury car it is not. Thankfully, $40,000 buys you a whole lot of used Audi S4. Plus, Audi made the S4 with a stick all the way up until 2016. With any luck, you’ll be able to get this AWD German sports saloon CPO and laugh all the way home when you don’t need to pay for the repairs. If not, well, just make sure you know how to turn a wrench. Hey, it’s worth it for 300+ hp and AWD.

The Hyundai Veloster N isn’t better than a Civic Type R

A pale blue 2022 Hyundai Veloster N shot from the front at sunset
The Veloster has very similar energy to the Type R | Hyundai

Objectively, the 2022 Hyundai Veloster N isn’t as good a driver’s car as the Civic Type R. That said, it’s the only one on the list that matches the energy of the Type R for less than 40 large ones. Loud styling and an even louder exhaust define this hot hatch, and we love the Veloster N for it. Just beware of a flinty ride and jealous glances from passersby.

The E46 BMW M3 is a good investment

A silver E46 BMW M3 shot from the 3/4 angle in a photo studio
$40K gets you the nicest E46 M3 out there | National Motor Museum via Getty Images

Finally, the “investment car.” If you can afford to spend $40K on a second car, buy the nicest E46 BMW M3 you can. Not only is it a sports car you can drive every day, but it’s an appreciating asset (as long as you’re careful with the mileage). This thing won’t beat the stock market, but you’ll be smiling more than anyone on r/wallstreetbets. Happy hunting.