We like
Comfortable ride, decent interior space, sharp looks, City Safety collision warning system.

Room for improvement
Rear seats feel cramped, huge turning circle, steep entry price and big-cost options.

Price and equipment

You’re paying premium coin for the V40. For the money here, you’re well into Audi A1 Sportback five-door territory, on the fringes of the BMW 1 Series and even casting an eye over Mini’s Countryman.

The standard equipment list is pretty rich, though. You sit on and mostly touch leather trim, the audio system features eight speakers and includes a USB port, the Bluetooth system pairs with phones and even streams music, satellite navigation is on a large, high-mounted colour screen in the centre of the dash that doubles as a display for the reversing camera, and in front of the driver sits a fully digital dashboard.

You also get dual-zone climate control that feeds into the back seats, and a cargo cover for the boot space.

Outside, there’s daytime running lights, 17-inch alloy wheels, dusk-sensing headlights that bend around corners, windscreen wipers that react to rainfall, and puddle lamps that light up the area around the V40.

Customising the Volvo to suit your needs can be an expensive business. Options added another $7825 - including a $100 hit just to allow the centre armrest to slide forward - to the price of our test car.

Admittedly, one high-cost item was the $5000 Driver Assist package that adds some pretty handy functions to the default City Safety system that can avoid or minimise a rear-end shunt.

It patches in a blind-spot monitor that also lets the driver know if another vehicle is passing in front, a system that displays speed zones, automatically dipping high-beam lights, lane diversion warning, adaptive cruise control that will even bring the car to a complete stop, and driver-assisted self-parking.

For free, you get those long, sweeping looks of the V40, the high-stacked LED tail-lights, shapely hips and aggressive-looking maw of the front facia.

Interior

Other car makers should take note, because one thing Volvo does consistently well is the interior.

The V40 houses the now-signature floating dash with the hidden cubby hole behind it that makes for a safe stash point away from prying eyes.

Volvo sells itself on the simplicity of its interiors, and it works. There are few hard lines, plenty of soft-touch surfaces, satin-look chromed highlights, a four-spoke leather-wrapped steering wheel with intuitive audio and cruise control buttons, and a tidy little cluster of dials and buttons to control the audio, air-conditioning, phone and sat-nav functions.

A frameless rear-view mirror is as much a fashion statement as it is functional.

The leather-clad front seats hug the body nicely and offer plenty of adjustment and support. Their integrated headrests – another Volvo trademark – sit high above the driver.

At first glance the storage space around the front, compromised by a traditional handbrake, appears to be a bit of a premium. However, get used to ducking in behind the centre console or slipping things into a small pocket on the front of the seat and you can use the two covered cupholders to hold drinks rather than mobile phones, wallets and purses.

The spaciousness up front comes at a bit of a cost, as the nicely sculpted rear seats are somewhat cramped for legroom and best suited to small adults or children. The narrow centre bench is really only a token seat, but houses a handy flip-down armrest with two cupholders.

The boot offers up to 335 litres of space above the floor (making it far from class-leading) and 432L with the rear seats folded down, but there’s also an extra 16 litres of stash space hidden away below the floor that keeps things out of the way of prying eyes.

It is accessed via an acutely angled tailgate featuring an integrated rear spoiler above the glass. The opening is a rather tight rectangle of load space, but on a positive note the way the tailgate cuts into the roof means you can sit on the boot lip without hitting your head on the sill.

Engine and transmission

Don’t be confused by the “T4” badge on the tailgate, because at the heart of the V40 lies a five-cylinder engine producing a healthy 132kW of power to the front wheels.

Strong, willing and with a pleasant, distinctive soundtrack for such a small displacement, it’s an excellent companion to the good-looking shell in which it is wrapped.

Despite its peaky figures, there’s next to no turbo lag at low revs, and most of the engine’s 300Nm of pulling power is available not far off idle.

The six-speed automatic transmission is down on numbers compared with some rivals, but in the main is a smooth, comfortable adjunct of the engine. If we are going to split hairs, it tends to hold gears a bit too long on hills in the name of fuel economy, and then quickly hunt for the right lower gear.

On paper, the Volvo V40 will sip 7.6 litres of premium unleaded fuel per 100 kilometres and emit 177 grams of carbon dioxide per kilometre. In our week behind the wheel, the figure was constantly hovering around the mid 8.0L/100km mark.

Ride and handling

Volvo has had its challenges in the past with the way its vehicles ride, but not any more.

The V40 is one of the most comfortable Volvo-badged cars on the road. OK, so it’s Euro-firm on its 17-inch rims, which translates into a slightly jiggly ride over rougher surfaces at higher speeds, but around town it soaks up anything in its path without fuss.

The place where you’ll notice the V40’s only vice is around the supermarket car park. Aim for a tight spot, and the Volvo’s lazy 11.7-metre turning circle – that’s larger than a Holden Commodore’s – will have you backing up for a second bite at it.

Grip from the Pirelli rubber is quite good, although the low-profile tyres can generate a bit of road noise from coarse-chip surfaces at higher speeds. Push too hard, though, and the nose of the V40 will start to push wide as it dissolves into understeer, and the electronic stability control will jump in to sort things out. It’s no sports car, so the system intervenes pretty harshly and early.

Safety and servicing

Seven airbags, including a driver’s knee airbag, help earn the V40 a top five-star crash rating.

The Volvo is also kind to any pedestrians that are unfortunate to step in front of it, with an airbag that pops up around the bonnet’s rim.

It’s details like this that has the V40 recognised by Australia’s crash test watchdog as a “standout performer”.

That hefty $5000 driver assist package we mentioned before adds some interesting functionality, and also a few quirks.

A red warning light that flashes up on the dash if you get too close to the car in front jumped at shadows a few times, and on a couple of occasions the V40 would slam on the brakes if a car in front was slowing down to turn off the freeway, even as you were crossing lanes to clear it.

The blind-spot warning system also picked up the odd bit of roadside furniture it thought was another car.

Volvo cars are covered by a three-year, unlimited kilometre warranty. When you take your car in for a service, Volvo says it will stump up a replacement car and even wash yours for free.

Verdict

Volvo’s compact hatch ticks a lot of boxes for buyers wanting a premium experience wrapped in a good-looking skin.

It doesn’t have the most spacious boot, the turning circle makes parking it a bit of a chore and the price of entry may exclude some from the svelte Swede’s fan base.

Otherwise, though, it’s a thoroughly enjoyable car.

Rivals

Audi A1 Sportback 1.8 TFSI Sport
, From $42,500 before on-road costs.

Drives well, but suffers from the same small-car foibles as the V40, such as the tight rear seat space and cramped boot. Turbo 1.4-litre four-pot produces as much power to the front wheels as the Volvo, using a seven-speed dual-clutch gearbox, but is well down on torque.

BMW 125i Urban
, From $50,377 before on-road costs. Front-engined, rear-drive layout makes this the dynamic leader of the small five-door pack. Costs more, but you get a rorty 160kW 2.0-litre turbo donk for the money mated to an eight-speed auto. Trade-offs are a rear pew that is more bench than back seat, and boot space.

Mini Cooper Countryman Chilli
, From $41,850 before on-road costs. The name says hot, but the reality says Mini’s first-ever five-door - and biggest-ever car - lacks a little of the brand’s traditional mojo. Its 1.6-litre turbo 2.0-litre engine and its six-speed auto reel out only 90kW to the front wheels, but the big Mini still has those go-kart-like traits. Decent boot, too.

Data

MAKE/MODEL: Volvo V40 T4 Luxury
, ENGINE: 1984cc turbocharged four-cylinder
, LAYOUT: FWD, transverse
, POWER: 132kW at 5000rpm
, TORQUE: 300Nm at 2700-4000rpm
, TRANSMISSION: Six-speed automatic
, 0-100km/h: 8.7secs
, TOP SPEED: 220km/h
, FUEL USE: 7.6L/100km, premium unleaded
, EMISSIONS: 177g/km
, L/W/H/W’BASE: 4369/1783/1420/2647mm
, WEIGHT: 1462kg
, SUSPENSION f/r: MacPherson/independent coil spring
, STEERING: Power-assisted rack and pinion
, BRAKES f/r: Discs/discs
, PRICE: From $45,990 before on-roads