The cheapest engine is a 154bhp 1.5-litre petrol (badged T3) and it's available exclusively with a manual gearbox and front-wheel drive. It's aimed at those doing relatively low miles who drive mostly around town – and that's a good thing because it's certainly no ball of fire.
There’s a pregnant pause before the boost from the turbocharger kicks in and, even then, it’s not as healthy a slug of power as you might like. You’ve got to wring out the engine to get motorway-merging performance and this simply doesn’t suit the XC40’s breezy, laid-back attitude.
The T5 petrol and D4 diesel engines – which get four-wheel drive and an eight-speed automatic gearbox as standard – are much more muscular. Both can whisk you up to speed swiftly – in fact, even the 2.0 D4 accelerates more quickly than a Volkswagen Tiguan 2.0 TDI 190. The T5 (also a 2.0-litre) feels even livelier when you rev it hard and is ultimately faster. However, the diesel offers stronger, more flexible performance at low revs. In the real world, that makes it more relaxing to drive and more recommendable.
The automatic gearbox can feel a little hesitant when you want a quick burst of acceleration but it's generally smooth thereafter.
There are two more engines: an entry-level diesel (D3) and a mid-range petrol (T4). However, we've yet to try either of these.
In many regards, the XC40’s ride is a level above its chief rivals' – most notably the firm-riding BMW X1 and the unsettled Jaguar E-Pace, but even relatively comfortable competitors such as the Tiguan.
Why? Well, at speed, the XC40 breezes you brilliantly over ripples and expansion joints, while also plucking the sting out of razor-edged potholes around town – even on whopping 20in alloy wheels that come as standard on some of the more expensive trims.
Curiously, the XC40 rides most comfortably on 'sports' suspension, which is fitted as standard to R-Design versions. The softer 'dynamic' suspension on other trim levels is still comfy, but isn't as well controlled over speed humps and crests. There's a bit of side-to-side movement along uneven roads with both suspension set-ups, but this is the case in the vast majority of SUVs and largely a matter of physics.
The optional adaptive suspension is best avoided, though. It causes the XC40 to pitch and wallow more along most roads and there's even the odd crash and wobble over potholes. The fact that you have to pay extra for this is really rather curious.
There are certainly tidier-handling SUVs in the class, with the BMW X2 and Seat Ateca springing to mind most readily. But while the XC40’s body does lean a fair bit through corners and its steering isn’t particularly feelsome, drive it in a relaxed manner – as most people will – and it handles perfectly well.
It changes direction capably and has lots of grip. Indeed, the composure that helps the car ride well also allows it to flow down an undulating B-road easily. Just don’t expect to have much fun.
R-Design models are slightly more composed through corners than other trims, thanks to their standard 'sports' suspension, although the difference isn't huge.
The entry-level T3 petrol is relatively hushed at low revs, although even gentle use of the accelerator elicits whooshes and whistles from the turbocharger. Rev the engine hard and it starts to sound a bit breathless and wheezy. At least you don't feel much vibration through the controls.
The T5 petrol offers smoother progress, working away peacefully in the background even when you rev it quite hard. Meanwhile, the D4 diesel is a tad grumbly at idle but, once past 1500rpm, it becomes a much smoother prospect than equivalent engines in an X1 or a Tiguan, fading almost entirely into the background at motorway speeds. You’re also isolated well from vibrations in all of the engines we've tried so far.
Better still, the suspension goes quietly about its business around town and there isn’t much wind noise at high speed. There is a noticeable amount of road noise, particularly on models with 20in wheels, but the XC40 is still nowhere near as raucous as an X1 along a typical stretch of motorway.
The front seats are some of the best you’ll find in any family SUV. There’s a wide range of adjustment for tilt and height, plus four-way electric lumbar adjustment on all versions. Go for Inscription trim or any Pro model and you'll also get a fully electric driver’s seat.
You sit higher than you do in many rivals, particularly the BMW X1. So instead of feeling like a slightly jacked-up family hatchback, the XC40 imparts the sensation that you’re in a proper SUV.
Digital instruments are standard and prove easy to read at a glance, and because the minimalist dashboard design carries few physical buttons, it’s easy to interpret those that are there. Our only criticism is that the degree of minimalism means you have to delve into the touchscreen simply to adjust the climate control. At least you can tweak the interior temperature by using voice control.
Slim windscreen pillars combine with the elevated seating to give you a good view forward, while the large door mirrors are great for letting you know what’s drawing up alongside – aided by blindspot monitoring if you add it as a stand-alone option or as part of the Intellisafe Pro pack.
Over-the-shoulder vision is compromised by the way the window line kicks up towards the rear of the car – so it's fortunate, then, that rear parking sensors are standard across the range (front parking sensors are also fitted to Inscription cars and are optional on other models). A rear-view camera and a bird's-eye-view camera are relatively inexpensive extras on all models.
As in other modern Volvos, the dashboard of the XC40 is dominated by a 9.0in tablet-style touchscreen that has allowed the designers to slash the number of buttons and create a minimalist ambience.
Not that the absence of buttons is all good news. While the idea of a screen that lets you swipe, pinch and scroll, like you do with an iPad, sounds good in theory, in reality it means simple tasks, such as changing the radio station or tapping an address into the sat-nav, require concentration. It’s not helped by the fact that some of the icons are small and the screen doesn’t always react that quickly to presses.
Still, at least the screen is crystal clear and there are plenty of features, including standard satellite-navigation and a DAB radio. Apple CarPlay and Android Auto smartphone mirroring is available as an option.
When it comes to interior quality, Volvo is now up there with the best in the business; the XC40 is no exception, looking and feeling exceptionally classy inside. The X1 and X2 are the only other cars in the family SUV class on a similar level.
All the surfaces that you interact with regularly feel suitably upmarket, thanks to plush, soft-faced materials, smart wood veneer or metal highlights. And everything feels robust, too, so should stand the test of time and the demands of family use.
Even with a space-sapping panoramic roof, there’s plenty of head room, lots of leg room and enough space to stop you from banging elbows with your front passenger. Volvo has even moved the lower audio speakers from the doors to the dashboard to free up extra space.
The XC40 features thoughtful details, such as a pop-out rubbish bin between the front seats, sliding drawers beneath them and door pockets that are big enough to take a laptop or two large bottles of water.
You also get a couple of big cupholders behind the gearlever and a sizeable cubby in front of it. This can be fitted with wireless charging for compatible smartphones.
Even though rear head and leg room aren’t as plentiful as they are in rivals such as the BMW X1 and Volkswagen Tiguan, the XC40 is still more than roomy enough for tall adults to sit comfortably without their heads brushing the rooflining or knees hitting the back of the front seats.
Three adults sitting side by side is also perfectly doable, thanks to the relatively wide rear bench, although the high central tunnel along the floor does limit foot space for the middle passenger. The only real issue is that the door openings are a little small, hindering getting in and out.
Split-folding rear seats are standard and, if you add the optional Convenience Pack, these can be lowered electrically with the flick of a switch inside the boot.
However, the seats are split 60/40, rather than in the more versatile 40/20/40 arrangement that the X1 and Tiguan offer.
And, unlike those rivals, the XC40 doesn’t have rear seats that slide to let you change the balance between rear leg room and luggage space, or recline to boost rear-seat comfort.
The XC40’s boot has a capacity of 460 litres, which appears underwhelming compared with the Tiguan’s and X1’s. However, its commendably square proportions make packing easy and, with the large underfloor storage area added into the mix (if you don’t have the optional spare wheel fitted), we managed to fit seven carry-on suitcases inside – the same number as in a Tiguan.
What’s more, there’s no load lip to heave luggage over. If you opt for the Convenience Pack, you can fold up part of the boot floor and fix it in a vertical position, creating a divide to stop smaller items from sliding around. This also provides handy hooks for hanging shopping bags.
The XC40 is priced relatively attractively for cash buyers and should hold its value extremely well – all of which means that PCP finance and leasing rates are fiercely competitive compared with a BMW X1 or Volkswagen Tiguan.
We’ve put the 2.0 D4 diesel, which includes four-wheel drive and an automatic gearbox as standard, through our real-world True MPG economy tests; it didn’t prove spectacularly efficient, with a combined result of 35.4mpg, but it did provide a very low NOx reading, making it cleaner than even some current petrol cars. Competitive official CO2 figures mean that company car drivers will find its benefit-in-kind tax relatively affordable, too.
The entry-level 1.5 T3 petrol is worth a look if you mostly drive in town because it's by far the cheapest XC40 you can buy. Meanwhile, the 2.0 T5 is the least economical petrol in the range, but that doesn’t mean you should ignore it if you don’t do lots of miles.
Use our True MPG calculator and see what your car really does to the gallon
Because entry-level Momentum trim offers lots of goodies – including cruise control, keyless start, dual-zone climate control, a 9.0in tablet touchscreen, digital instruments, 18in alloy wheels, LED headlights and rear parking sensors – many people will be quite happy to stick with that. You can’t have it with our favourite D4 engine, though.
For that, you need the even better equipped, sportier but still reasonably priced R-Design. This adds seats trimmed in leather and nubuck, power-folding door mirrors, privacy glass and multicolour ambient theatre lighting. It's the trim we recommend.
The more luxurious Inscription model completes the range, and even this isn't exorbitantly priced relative to the competition.
Options worth considering include the Convenience Pack, for its extra practicality; the Intellisafe Pro Pack, for added safety and semi-autonomous driving tech; metallic paint, for better resale opportunities; as well as keyless entry and a power-operated tailgate.
The XC40 is too new to feature in our most recent reliability survey, but Volvo as a brand finished behind BMW and Volkswagen in a relatively disappointing 25th (out of 32 manufacturers).
A three-year, 60,000-mile warranty, including roadside assistance, is standard, as is a three-year paintwork warranty and 12 years of cover against rust. This is par for the course in the family SUV class.
The XC40 is currently awaiting classification from Euro NCAP, but we have it on good authority that it will gain a top five-star rating. That’s in part due to the bundles of safety kit, including a standard automatic emergency braking system that not only recognises other cars but also cyclists, pedestrians and large animals.
Likewise, all XC40s come with traffic sign recognition and an Oncoming Lane Mitigation system, which can intervene if you inadvertently cross a road's centre line into the path of oncoming traffic. Meanwhile, blindspot monitoring and rear cross traffic alert are available as options; these are also part of the Intellisafe Pro Pack, which features a semi-autonomous driving function that can steer, accelerate and brake for you.
As is customary on cars of this sort, an alarm and engine immobiliser are fitted to boost security.
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