The 2025 Volvo XC40 stands out in the crowded luxury subcompact SUV market with its blend of Swedish style, advanced safety features, and thoughtful practicality. This model brings a fresh approach to Volvo’s legacy of boxy, utilitarian vehicles, presenting a compact, two-row crossover that merges aesthetic appeal with functionality. Priced from $41,945, the XC40 offers a compelling option for drivers seeking a premium feel without an exorbitant price.

For 2025, Volvo makes small updates to the XC40’s lineup, adding a new Sand Dune color and replacing the "Ultimate" trim with "Ultra." All models now come exclusively with all-wheel drive, simplifying the lineup and enhancing capability. The XC40’s turbocharged 2.0-liter four-cylinder engine generates a strong 247 horsepower, aided by a 48-volt hybrid system. This powertrain is paired with a smooth eight-speed automatic transmission, delivering capable acceleration with a 0-60 mph time of 6.1 seconds. With a towing capacity of up to 3,500 pounds, the XC40 defies expectations for a compact luxury crossover by offering surprising versatility.

The XC40’s EPA-rated fuel economy of 24 mpg city and 30 mpg highway keeps it competitive in its class. However, a real-world test resulted in an average of 27 mpg on the highway, slightly below some of its key competitors. Despite this, the XC40’s overall driving experience remains a high point, with nimble handling and a balanced ride that feels neither too soft nor overly firm.

Inside, the XC40 exudes a Scandinavian-inspired charm that complements its luxury positioning. The cabin design incorporates elegant materials like high-quality metals and optional driftwood trim, enhancing the XC40’s minimalist yet upscale ambiance. Even the base trim offers a welcoming atmosphere, while upper trims like Ultra take sophistication further with leather upholstery and details like the striking Orrefors crystal gear shifter. The cabin feels spacious, with ample legroom in both rows and plenty of headroom for taller passengers. Cargo space is thoughtfully planned, featuring convenient storage solutions like a flip-out hook for bags, a removable waste bin in the center console, and a cargo area divider, adding practicality to the XC40’s stylish presentation.

Volvo’s Google-based infotainment system anchors the cabin, displayed on a bright, vertically oriented 9-inch touchscreen. It’s responsive and intuitively organized, but some icons are small, making them a bit challenging to use while driving. Standard features include Apple CarPlay, Android Auto, and a Wi-Fi hotspot, ensuring that passengers stay connected. With its robust suite of standard driver-assistance features, the XC40 is a leader in safety. Volvo includes automated emergency braking, blind-spot assistance, lane-departure warning, and cross-traffic alert as standard. Optional upgrades like adaptive cruise control with a semi-autonomous driving mode make the XC40 an appealing choice for safety-conscious buyers.

In terms of warranty, Volvo offers a competitive package, covering four years or 50,000 miles for both limited and powertrain warranties. Complimentary scheduled maintenance for three years or 36,000 miles adds extra value, ensuring a more cost-effective ownership experience. For buyers interested in style, safety, and an all-around practical driving experience, the 2025 Volvo XC40 represents a smart investment in the subcompact luxury SUV space.