This Swedish SUV proves you don't need a German badge to get luxury—and it'll save you thousands

Published Jul 27, 2026, 4:00 PM EDT Tyler is an automotive journalist and content contributor at How-To Geek with over three years of experience covering the automotive industry. His work focuses on delivering clear, well-researched, and engaging content that helps readers better understand the vehicles they drive and the technology behind them. Before entering automotive media, he spent five years as an academic editor, developing a strong foundation in research methodology, factual accuracy, and structured analysis. This background informs his journalistic approach today, ensuring that every article balances technical insight with accessibility for a broad audience. Tyler specializes in automotive journalism, content strategy, and SEO-driven publishing, with a particular interest in performance, reliability, and the cultural role of cars. He approaches automotive writing with a distinct philosophy: vehicles should be engaging and expressive, not merely functional tools. This perspective shapes his coverage and allows readers to connect with cars beyond basic specifications. German luxury brands have long dominated the entry-level premium SUV segment, but they're no longer the only compelling option. As prices continue to rise and desirable features are increasingly locked behind expensive option packages, buyers are starting to look beyond the traditional choices in search of better overall value. One overlooked Scandinavian SUV makes a particularly strong case. It undercuts rivals from BMW, Audi, and Mercedes-Benz while including far more standard equipment, all without sacrificing the refined cabin, comfort, and quality expected from a premium vehicle. For buyers who value substance over badge prestige, it may be the smartest luxury SUV in its class. In order to give you the most up-to-date and accurate information possible, the data used to compile this article was sourced from Volvo and other authoritative sources, including the EPA. The 2026 Volvo XC40 starts thousands cheaper than its German rivals An overlooked option packed with value Small luxury SUVs are growing more and more popular. People are realizing that they don't need to shell out tons of money for flagship models to get most of the luxury features that they're after. If you're looking for a small yet plush SUV, you've likely already looked at the usual suspects from BMW, Audi, and Mercedes-Benz. However, there is a less popular option that offers more luxury for less money. The Volvo XC40 is a fantastic little SUV that undercuts its rivals without compromising on quality. It comes packed with loads of standard features Models Starting MSRP B4 Core $41,295 B5 Core $43,995 B4 Plus $45,295 B5 Plus $48,695 B5 Ultra $52,645 If you've shopped around in the luxury subcompact SUV segment, you'll already know that the Volvo is a little cheaper than its German rivals. You'd spend a couple of thousand dollars more on something like a BMW X1 or an Audi Q3. More impressive than its starting price, though, is the long list of features that the Swedish automaker includes as standard. Where German rivals hide desirable equipment in optional packages, the Volvo includes a ton of kit, even in the most affordable models. We think that most buyers in this segment will find the Core package has everything that they're looking for. As mentioned, a lot of the standard features in this model would cost you extra if you bought a German competitor. This means choosing between the B4 or B5 powertrain setup. While the former is a little more efficient, and a little cheaper, we don't think it does enough to pull us away from the B5, which is quite a bit more powerful. The XC40 focuses on simple and quiet luxury It skips the segment's usual flash In the current landscape, we think that a lot of luxury automakers have pushed their design languages a little too far in a bid to stand out amongst the crowd. This leaves a lot of luxury options feeling a little too loud and over-designed for a lot of buyers. People who want something a little more traditional will appreciate the restraint that the Swedes have shown in the XC40. Don't think that means that they've skimped on features, though. Luxury doesn't have to be loud Front row headroom 37.6 inches Front row legroom 40.9 inches Second row headroom 38.3 inches Second row legroom 36.1 inches Cargo capacity 16 cubic feet While some rivals might be a little more spacious on the inside, but the XC40 is still reasonably practical. There's enough space in the back for adults to slide in, though taller passengers might complain about a slight lack of legroom. The trunk is also pretty cramped. Volvo does, however, offer a lot of smart little storage solutions, such as a hook on the glovebox for holding groceries and a removable trash can in the center console. Unlike a lot of other luxury automakers right now, Volvo focuses on letting high-quality materials and top-end features speak for themselves, rather than imbuing their cars with loud, flashy designs. The XC40 demonstrates this fantastically, with a neat cabin that feels light and airy. Even the most affordable models come with features like power-adjustable seats with lumbar support and a memory function. Top trims come with classier touches, like wood trim and an Orrefors crystal shift knob. More standard tech than you'd expect As is Volvo's style, the standard nine-inch infotainment screen in the XC40 is mounted on the dashboard vertically rather than horizontally. The system is pretty easy to navigate, and it responds quickly to inputs, though the icons are a little small and hard to see while keeping your eyes on the road. Every model, including the Core, comes equipped with Android Auto and Apple CarPlay, though you need a wire to connect regardless of which trim you opt for. You also get a standard wireless smartphone charging pad and eight-speaker sound system. Top trims come with other niceties, like a 360-degree camera, an air purifying HVAC system, and a 13-speaker Harman/Kardon sound system. It may be reserved, but the XC40 is still quick enough off the line As long as you stick with the B5 powertrain, that is Credit: Volvo Volvo understands that a lot of its buyers aren't looking for a car that puts performance above all else. Rather than being raucous, the XC40 focuses on delivering a quiet and comfortable experience for you and your passengers. That being said, it comes with enough grunt to get you going quicker than the average crossover, and it has enough personality to keep you from getting bored. Quick, quiet, and comfortable Base Trim Engine 2L Drive-E I4 Hybrid Base Trim Transmission 8-speed automatic Base Trim Drivetrain Front-Wheel Drive Base Trim Horsepower 194 HP @4700 RPM Base Trim Torque 221 lb.-ft. @ 1400 RPM Base Trim Battery Type Lead acid battery Make Volvo Model XC40 Segment Subcompact Luxury SUV Regardless of whether you opt for the B4 or the B5, every 2026 Volvo XC40 comes fitted with a turbocharged four-cylinder engine under the hood. Both are also mild hybrids which make use of a 48-volt system. The difference is in the output, with the B4 making 194 horses and the B5 making 247 horsepower. B4 models are also front-wheel drive, while B5 models are all-wheel drive. In either case, you get a smooth shifting eight-speed automatic. The B5 XC40 gets up to 60 miles per hour from a standstill in around 6.1 seconds. While this is a few tenths slower than some of its German rivals, we think it is more than quick enough for most buyers in this segment. It might not be the most exciting car from behind the wheel, but it handles its weight well and responds quickly enough to inputs. More importantly, though, its ride is incredibly comfortable. The XC40 offers more features for less money than its German competitors The gap in price between an XC40 and its German rivals isn't massive, but we don't know many people who would scoff away a few thousand dollars. More impressive than the price gap, though, is the fact that Volvo includes most of the features that luxury buyers are after as standard in their most affordable model. Combine this stellar value with its plush interior and smooth performance, and you get a luxury deal that is pretty hard to pass up on.