Audi A4, BMW 3 Series and Mercedes C-Class 2016 review

You call that luxury? Not according to the tax man.

These three prestige sedans are exempt from Luxury Car Tax because they are priced below the threshold that adds 33 per cent to every dollar above $63,184.

No wonder Australians are embracing them in record numbers.

The Mercedes-Benz C-Class has been the second-best selling medium-size sedan for the past two years -- behind the Toyota Camry -- despite costing more than twice the price.

The Audi A4 and BMW 3 Series outsell mid-size sedans from Ford, Honda and Hyundai.

With the arrival this month of the new Audi A4, and the recent update to the BMW 3 Series, it was time to acquaint them with the benchmark of the class, the Mercedes C-Class.

Audi A4

This might look like the old model but the all-new Audi A4 has a lighter body, a roomier cabin and a bigger footprint.

Conversely, the price has shrunk.

The A4 now starts from $55,500 plus on-road costs, which is $2000 less than before, despite extra equipment.

This makes it $600 dearer than the cheapest (and lesser equipped) BMW 3 Series -- but $5400 cheaper than the Mercedes C-Class.

Audi was able to undercut Mercedes by such a margin because it has chosen to introduce a 1.4-litre turbo petrol model (versus the 2.0-litre turbo in the C-Class).

It's the smallest engine ever fitted to an A4 sold in Australia, but not the only one to downsize (the BMW 3 Series we've tested has a 1.5-litre three-cylinder).

Despite its small heart, the new A4 is a lot of car for the money.

It has technology that can spot passing cars and cyclists when parked -- warning the driver before he or she gets out -- and automatic emergency braking works from 85km/h, versus 70km/h on the Mercedes. AEB is not even available as an option on the BMW 318i.

Unique among this trio, it will automatically slam the brakes if you unintentionally turn into the path of an oncoming car.

It can also sense a rear impact is imminent, and strobe-flash the brake lights to alert the driver of the incoming car.

The interior of the A4 is a clean and understated design. While it has a host of technology (including a digital widescreen for the instrument display), it lacks the luxury feel of the Mercedes.

The same could be said of the way the new A4 drives. It is quiet and refined, and the 1.4-litre turbo petrol engine is a smooth operator and has sufficient power for normal driving.

But the new A4 doesn't hug the road or soak up bumps in the same way as the BMW or Mercedes.

BMW 3 Series

The BMW 3 Series was once the benchmark of the class, but times have changed.

Mercedes now sells more than twice as many mid-size sedans as BMW and more than three times as many as Audi.

While BMW designers and engineers are working on ways to claw back lost ground with the next generation 3 Series due in a couple years, the Munich maker has released a mid-term update to the model it released in 2012 -- and a new cut-price model, from $54,900.

Since October 2015 standard fare includes 18-inch alloy wheels, eight-speed automatic transmission, a heads-up display, lane change warning and, as with all cars in this test, LED headlights.

To make up for not having a rear-view camera for so long, BMW has gone one better and made a 360-degree view camera standard.

The biggest change, of course, was the introduction of the three-cylinder engine.

It's the slowest among this trio but nevertheless makes good use of the eight-speed auto; short ratios get it away smartly and tall ratios provide exceptional economy at freeway speeds.

BMW has turned a spanner on the suspension, and made it less choppy over bumps -- and it's still the benchmark for precise steering feel.

But the cabin is starting to look dated, even with $11,000 worth of options BMW added to the media evaluation vehicle.

Despite the spruce up, the BMW falls short when standard equipment lists are compared.

Mercedes-Benz C-Class

The Mercedes C-Class still looks as fresh -- inside and out -- as when it was launched in August 2014.

With its sleek lines and classy cabin it's also holding up well against newer or revised rivals from Germany, Japan and the UK.

But it's not the cheapest in the segment.

While Audi and BMW have "price leader" models with smaller engines, Mercedes says it doesn't want to limbo under the $60,000 barrier with this car, even though downsized donks are available overseas.

Powered by a 2.0-litre turbo engine, the C-Class has a massive advantage when it comes to performance -- but it comes at a cost, starting at $60,900, at least $5400 dearer than its rivals.

The extra grunt is noticeable the instant you floor the accelerator, shifting smoothly through the seven-speed auto.

Despite the bigger engine, the C-Class still has excellent fuel economy.

The Mercedes has the most luxurious suspension feel over bumps among this trio and yet it still corners with poise.

The cabin is noticeably roomier than the BMW and back seat space is on par with the front-drive Audi.

Our test car was equipped with a $3454 "Vision Package", which includes a panorama sunroof, an "intelligent" lighting system, and heads-up display. A worthwhile option pack if the budget stretches that far.

Even without these extra touches, the Mercedes C-Class remains a class act.

Verdict

Although it's not the most luxurious to drive, the new Audi A4 wins this test on price, technology, equipment and low running costs.

If similarly priced 2.0-litre turbo versions of each model were compared, the Mercedes C-Class would remain the benchmark for the class.

Audi A4 1.4 TFSI

Price from: $55,500 plus on-roads
Price as tested: $58,420
Warranty: 3 years/unlimited km
Capped servicing: $1620 over 3 years
Service interval: 12 months/15,000km
Safety: 5 stars, 8 airbags
Engine: 1.4-litre 4-cyl turbo, 110kW/250Nm
Transmission: 7-speed auto; FWD
Thirst: 5.5L/100km
Dimensions: 4726mm (L), 1842mm (W), 1427mm (H), 2820mm (WB)
Weight: 1450kg
Spare: Space-saver
0-100km/h: 8.5 secs

Click here to see more 2016 Audi A4 pricing and spec info.

BMW 318i

Price from: $54,900 plus on-roads
Price as tested: $65,972
Warranty: 3 years/unlimited km
Capped servicing: $2017 over 3 years
Service interval: LCondition based (usually 12 months/15,000km)
Safety: 5 stars, 6 airbags
Engine: 1.5-litre 3-cyl turbo, 100kW/220Nm
Transmission: 8-speed auto; RWD
Thirst: 5.4L/100km
Dimensions: 4633mm (L), 1811mm (W), 1429mm (H), 2810mm (WB)
Weight: 1500kg
Spare: None; run-flats
0-100km/h: 9.1 secs

Click here to see more 2016 BMW 3 Series pricing and spec info.

Mercedes-Benz C200

Price from: $60,900 plus on-roads
Price as tested: $64,354
Warranty: 3 years/unlimited km
Capped servicing: $1980 over 3 years
Service interval: 12 months/25,000km
Safety: 5 stars, 8 airbags
Engine: 2.0-litre 4-cyl turbo, 135kW/300Nm
Transmission: 7-speed auto; RWD
Thirst: 6.0L/100km
Dimensions: 4686mm (L), 1810mm (W), 1442mm (H), 2840mm (WB)
Weight: 1465kg
Spare: None; run-flats
0-100km/h: 7.3 secs

Click here to see more 2016 Mercedes-Benz C-Class pricing and spec info.