Audi’s S3 Sedan Just Became The Best Sleeper In Its Class: Review

In a market crowded with hyper hatches like the Audi RS3 and Mercedes-AMG A 45 S, it might seem like there’s little room or need for a car like the Audi S3. Yet with the RS3 now starting at more than AU$105,000 ($68,500) for the Sedan in Australia, the S3 makes a strong case for itself as the more attainable option in Audi’s performance lineup.

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Within the broader hot compact crowd, the S3 still manages to carve out its own niche. It’s all-wheel drive, just like the VW Golf R and Toyota GR Corolla, and combines thrilling performance with luxury and brand cache that only BMW and Mercedes-Benz can compete with in this segment.

The new 2026 S3 should also be better than its predecessors. It has more power, edgier looks, and has also recently received a facelift. The question is, how well does it hold up in its more traditional sedan form?

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Photos Brad Anderson / Carscoops

What Do You Get For Your Money?

Sharing much of its componentry with the related VW Golf R, which, as we all know, took a monumental leap forward for its eighth generation, the current S3 has plenty going for it. In the looks department, however, there’s not that much to separate it from a lesser A3 model.

Given that the standard A3, in both Sportback and Sedan guises, is already quite striking, Audi’s designers perhaps didn’t have much room to amp up the design of the S3 without stepping on the toes of the RS3. To most, the S3 will look just like an A3 with the S Line package, and it doesn’t even have an S3 badge on the grille, arguably making it a little too subtle.

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While the Ingoldstadt brand perhaps could have made more of an effort to ensure the S3 looks the part, it has at least given it a seriously spritely engine.

Much like the Golf R, the new Audi S3 features VW’s renowned EA288 2.0-liter turbocharged four-cylinder engine. The previous-gen S3 had 221 kW (296 hp), but Audi upped this to 238 kW (319 hp) for the car’s fourth generation. Now, in facelifted 2026MY guise, power has been upped again, now sitting at 245 kW (329 hp) and 420 Nm (310 lb-ft) of torque. That should be more than enough to get even the most power-hungry enthusiast excited.

However, it’s not the engine changes that really separate this new S3 from all of its predecessors. Instead, it’s the all-wheel drive system. Rather than featuring VW’s traditional Haldex-style rear differential, it has the same ‘torque splitter’ differential as the RS3, which transformed the way that hyper hatch handles. It does the same for the S3.

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In Australia, prices start at AU$81,800 (equal to $53,400 at current exchange rates), but our tester had the AU$1,450 ($947) Launch edition package. This adds 19-inch Audi Sport wheels, black tailpipe trims, black mirror caps, privacy glass, and puddle lights with the S logo.

This is a lot of money, there’s no question about it. By comparison, the mechanically related Mk 8.5 VW Golf R starts at a more palpable AU$70,990 ($46,300), while the automatic-equipped Toyota GR Corolla is priced from AU$70,490 ($46,000).

Photos Brad Anderson / Carscoops

An Almost Standard A3 Interior

Inside, there’s little to separate the S3 from cheaper A3 models. That means there’s the same dashboard layout, the 12.3-inch digital instrument cluster, and the same 10.1-inch MMI infotainment display. The S3 also comes with the same piano black plastic center console as most other new Audis, complete with a small toggle to shift between the gears.

Like many recent Audi interiors, there is an excessive amount of hard black plastic for my liking, particularly across the dash and on the door panels. However, there is one neat feature with the door panels. A large area in the center is trimmed in Alcantara, with hundreds of tiny cutouts that the configurable ambient lighting shines through.

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Additionally, the S3 comes with distinctive Fine Nappa leather seats with diamond contrast stitching and S embossing. There is also a brilliant Sonos 3D premium sound system with 15 speakers, DAB+ digital radio, and both wireless Apple CarPlay and Android Auto.

Photos Brad Anderson / Carscoops

Functionally, the cabin is great. It’s nice to see Audi has kept physical controls for the climate system. Additionally, the S3 doesn’t have the same terrible capacitive steering wheel buttons as other new-generation Audi models, opting for more traditional buttons and scroll wheels instead.

There’s a surprising amount of room in both the front and rear of the car, and it can carry four adults in relative comfort.

An AWD Sprinter

Given how much power the S3 has, combined with its superb all-wheel drive system and seven-speed S-tronic transmission, I knew it’d feel quick. However, it proved to be quicker than Audi claims. According to the brand, it needs 4.7 seconds to hit 100 km/h (62 mph), but I was able to rattle off repeatable 4.5-second times in the dry, and 4.7-second runs in the wet.

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Like plenty of other VW Group products, there is a wide selection of driving modes available, including a new one for the facelifted S3 known as ‘Dynamic Plus.’ I primarily drove in Individual mode, with options like the engine, exhaust note, and torque splitter in their sportiest modes, but the suspension in its softest.

The all-wheel drive system, combined with the new rear differential, is a revelation. The old S3, as well as the Mk7-generation VW Golf, both had a tendency to push into understeer the moment you even thought about entering a corner with a little too much speed. That’s no longer the case.

The fully variable torque splitter differential can send up to 100 percent of rear torque to one of the rear wheels, and in Dynamic mode, it helps to give the car a rear-biased feel, so much so that the rear will often let loose before the front. Thanks to the trick new diff, the 2026MY S3 is much more confidence-inspiring to hustle hard than its forebears.

Those who’d prefer a slightly more neutral feel can switch the torque splitter into Sport mode. Or, if you want to go the other way, the S3’s Dynamic Plus mode makes it even more thrilling to drive on the limit, allowing it to chew up the pavement at frightening speeds and with shocking ease. Aiding in the immense amounts of grip are a set of sticky Goodyear Eagle F1 Super Sport tires.

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The handling-focused changes made to this current-gen S3 don’t stop there. There’s now 1.5 degrees of camber at the front and stiffened front wishbone bearings. The result is a car that not only feels properly rapid along a twisty, mountain road, but is also heaps of fun to drive.

When driven in one of the sportier modes, the S3 also delivers an intoxicating note from its four tailpipes, creating some lovely burbles on the overrun and between gear changes. Shoppers seeking the ultimate auditory experience can also option a full Akrapovic titanium exhaust, although at AU$9,900 ($6,400), it’s certainly not cheap.

Photos Brad Anderson / Carscoops

The feel through the steering wheel is good, albeit not class-leading. Fortunately, it is direct and well-weighted, ensuring the S3 is just as easy to thread through a sweeping corner as it is to maneuver around a car park or through traffic.

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Unlike many other hot compacts on the market, the Audi S3 does not feel at all compromised as a daily driver. It’s fitted as standard with adaptive dampers and remains poised over even the roughest and trickiest roads. With the drivetrain switched into its least aggressive modes, and the gearbox left in automatic to do its own thing, it can be easy to forget that you’re actually driving an S3, not just a standard A3.

Verdict

After living with the new Audi S3 for a week, I was left wondering if it might just be the most well-rounded hot compacts on the market, regardless if it’s a hatch or a sedan. Sure, it may rarely be mentioned in the same breath as the likes of the VW Golf R, Toyota GR Yaris/GR Corolla, and raucous front-wheel drive models like the Honda Civic Type R, but it deserves to be.

Is it the most fun-to-drive hot compact available? No, keen drivers will probably find the likes of the Toyota and Honda more enjoyable during a quick blast up a mountain road. But, much like the Golf R, the S3 is better suited to the daily grind than some of its competitors, yet still offers heaps of fun when you want to have it. Whether you’re driving to the shops or planning a track day, the latest S3 will be up to the task, which makes it one of the most versatile choices in the segment.

Photos Brad Anderson / Carscoops