The Audi S3, based on the A3, steps up as a performance sedan, all while costing less than $44,000 for the base model. Even with its Volkswagen Golf underpinnings, the S3 looks and feels completely like an Audi, making it more than worthy of its S badge.

For 2018, changes are limited to the addition of two USB ports as standard equipment, along with heated front seats. A new S Sport package comes with red brake calipers and Audi magnetic ride dampers.

Under the hood is a transversely mounted 4-cylinder. It’s the same engine used in the VW Golf R, a 2.0-liter unit with a turbocharger that makes 292 horsepower and 280 pound-feet of torque. While that’s not as much grunt as the S3’s German competitors such as the Mercedes-Benz AMG CLA45 and the BMW M2, the Audi makes the most of its power with Quattro all-wheel drive (AWD). It will do 0-60 mph in 4.6 seconds and go on to an electronically limited top speed of 155 mph.

Unfortunately, the S3 is available only with a 6-speed dual-clutch automatic with paddle shifters. (If drivers really want a manual S3, they’ll have to move to Europe.) Being a high-strung turbo, the S3’s engine sips premium gas, but should return 22 mpg city, 28 highway, 25 combined, making its fuel efficiency relatively competitive for an AWD sporty car.

The S3 sits about 1 inch lower than the regular A3, offering enhanced handling compared to the more pedestrian sedan. Steering is by electric power assist, and the all-new S Sport package adds magnetic dampers as well as red brake calipers. The Audi Drive Select system features Auto, Comfort, and Dynamic modes as well as a driver-configurable Individual mode that can tailor the car’s driving dynamics to personal preferences.

The S3 is not a spacious car, and the first place passengers will notice this is in the backseat. The interior has been criticized for not feeling particularly premium for a car that costs over $40,000, but it does come with standard leather upholstery, dual-zone automatic climate control, a panoramic sunroof, bolstered sports seats, and both Apple CarPlay and Android Auto compatibility.

Audi’s MMI infotainment system is also one of the better ones on the market. Audi’s Virtual Cockpit, featuring a configurable 12.3-inch digital instrument panel, comes on the S3 as well. Stepping up to the S3 Prestige model, meanwhile, adds a 14-speaker Bang & Olufsen sound system, ambient interior lighting, and several active safety features in addition to LED rear foglights. Optional features include sportier seats up front and rear side airbags as well as 19-inch wheels.

Standard features include a reversing camera, parking sensors front and back, forward-collision warning with automatic emergency braking, and pre-collision restraint prep, while options include active lane assist, adaptive cruise control with stop and go, and blind-spot monitors.

Like other fast Audis, the S3 is a wolf in sheep’s clothing: it has impressive performance chops while also remaining a comfortable, practical, year-round-usable daily driver.