OverviewTHIRTY-five is the age in which a person can no longer ‘round down’ to being closer to a youthful twenty-something, but those digits – in thousands of dollars, not human years – also happen to represent the step-off point from a mainstream to a premium small car, like the Audi A3 1.0 TFSI.

Quite aptly the Audi A3 has long been the mature, intelligent option in the premium small car class.

The 1.0 TFSI is also the most affordable of a German-badged, five-door hatchback trio that also includes the BMW 118i and Mercedes-Benz A180. The entry-level A3 was updated late last year with more equipment than before, plus a new, downsized three-cylinder turbocharged engine.

As a mainstream Volkswagen Golf, for example, tails off at around this price and hands the reins to its sportier GTI model grades, this Audi just gets started. It also starts from a higher cabin quality base, though is that enough for buyers to make the leap beyond the mainstream small car leader?Price and equipmentPriced from $36,200 plus on-road costs, the A3 1.0 TFSI costs no more than the 1.4 TFSI that it replaces, and it remains available only in a five-door hatchback – dubbed Sportback – body style. As the names suggest, a turbocharged 1.4-litre four-cylinder has given way to a 1.0-litre three-cylinder unit.

However, the entry-level Audi small car also now scores autonomous emergency braking (AEB), satellite navigation, a reversing camera, and rear parking sensors, the latter trio of which previously cost $2990 combined. Along with a leather-wrapped steering wheel, high-resolution screen and dual-zone climate control, it is now difficult to pick the 1.0 TFSI as a base model.

Although 16-inch alloy wheels give the game away outside, 17s and LED headlights are a $2500 package option. An even more expensive bundle features leather trim, electrically adjustable/heated front seats, keyless auto-entry and an auto-dimming rearview mirror for $2700 more.

Meanwhile, Apple CarPlay/Android Auto adds $650 to the price, along with should-be-standard USB connectivity, while a digital radio requires $500 more.

Add all of the above, and this A3 comes to $42,250 all told.

InteriorThe interior of this Audi is virtually indistinguishable from A3 model grades costing almost twice the price. Indeed the soft-touch plastics, tactile knurled-silver controls and excellent fit-and-finish certainly shine brightest in entry-level guise relative to any competitor in any class at this price.

The 7.0-inch screen delivers crisp graphics that are a near-perfect match for the simple-to-use controls of Audi’s Multi-Media Interface system comprising a centre console-mounted rotary dial flanked by shortcut buttons and aircraft-like toggle switches. It works a treat, and looks high-end.

While it is disappointing that the single USB port only charges a smartphone, and does not connect with it unless the aforementioned option package is ticked, it would be worth using its inclusion as a bargaining chip in the showroom as that is the A3’s only major shortfall inside. Otherwise, there is Bluetooth phone and audio streaming with easily accessible menus, intuitive voice control for the satellite navigation and other functions, plus a digital speedometer.

Further rearward and back-seat space is above average for the segment, complete with a tilted-up bench to aid under-thigh support, lower console-mounted air vents, soft-touch surfacing on the door trims and decent storage including door pockets, map pockets and a 12-volt power outlet. A 380-litre boot is likewise among the largest found in the segment, ideally rounding out a great interior.

Engine and transmissionBest not be afraid by a three-cylinder engine lurking under the bonnet of this premium small car, because the 1.0-litre turbocharged ‘triple’ is a brilliant, hybrid-efficiency-challenging unit. An ultra-competitive 200Nm of torque delivered between 2000rpm and 3500rpm is the highlight, with a more modest 85kW of power from 5000rpm until 5500rpm coming in a distant second.

When required to push along a vehicle with a 1200kg kerb weight – 41kg lighter than an entry-level four-cylinder Golf – this Audi engine proves more than the sum of its outputs and it feels faster than its 9.9-second 0-100km/h claim would indicate. It is sweetly responsive, superbly refined and, perhaps best of all, amazingly economical.

The seven-speed dual-clutch automatic transmission adeptly chooses tall gears quickly, in order to take advantage of the low-rev torque, yet it never dawdles when asked to deliver maximum acceleration. Even in dense urban traffic a trip computer fuel consumption readout of 6.5 litres per 100 kilometres is all too easy to achieve, while freeway running saw 4.9L/100km for an overall combined-conditions figure of 5.7L/100km – just 0.9L/100km beyond its laboratory-official claim.

While closing in on $40,000 means rapidly approaching and entering hot hatchback territory, the sheer efficiency of the A3 1.0 TFSI is as impressive as a faster model’s performance would be. For the non-sporting buyer, it makes good sense for the environment and hip-pocket alike.

Ride and handlingWhen the entry-level A3 was updated late last year it lost more than just a cylinder. In moving from four- to three-cylinder turbo power this Audi also dropped its independent rear suspension (IRS) setup and adopted a simpler torsion beam axle used in various model grades overseas.

Despite rolling on standard 55-aspect 16-inch tyres that would typically aid ride quality, the 1.0 TFSI now can feel stilted across lumpy road surfaces that IRS-equipped A3s quell beautifully.

Mostly it remains decently absorbent, but it takes a step back from being brilliant to merely decent.

On the upside, the steering remains fluent and crisp, and if anything the handling seems to be even more impressive with weight removed thanks to a smaller engine under the bonnet. This Audi turns into corners with keen agility and a fleet-footed feel in keeping with its ‘stripped back’ ethos.

In addition to being fun, however, should a small car at this price feel more sophisticated? Probably, yes, although IRS does return on the now middle-tier $40,300 A3 1.4 TFSI model grade. It would seem like $4100 extra well-spent for the increase in ride quality alone.

Safety and servicingSeven airbags (including dual front, front-side and full-length curtain protection), ABS and switchable electronic stability control (ESC), rearview camera and autonomous emergency braking (AEB) are all standard.

ANCAP awarded the Audi A3 range 36.41 out of 38 points, for a five-star rating, in 2013.

Audi’s three-year/45,000km capped-price servicing plan costs $1680 for three dealer check-ups, or an average of $560 each.

VerdictThe A3 1.0 TFSI delivers a duo of unique and, some would say, contrasting virtues.

On the one hand it delivers class-benchmark cabin quality and a genuine premium vibe despite not being terribly well-equipped. On the other, it strips down the platform and becomes ultra-frugal.

The new three-cylinder turbo engine is as delightful as it is economical, and the steering and handling prove quite fun. There is a layer of depth missing from the ride quality and standard infotainment system, but at least both can be upgraded for minimal extra outlay, the former aspect in the A3 1.4 TFSI and the latter in this model for less than a thousand dollars in extra-cost options.

Quite simply this Audi A3 is to hybrid efficiency and premium finish what a Volkswagen Golf GTI is to hot hatchback dynamics, and only a buyer can best decide which virtues are more preferable.

RivalsBMW 118i from $39,990 plus on-road costs
More expensive, slightly faster, even more dynamic.

Mercedes-Benz A180 from $38,700 plus on-road costs
Ramps up the funk, but cabin quality and refinement falls short.