Best Medium Luxury Car

Despite the swell of popularity in SUV segments, traditional sedans (and in some cases wagons) are still a common sight on Australian roads.

Medium luxury cars still earn strong sales in Australia, and strike the right balance of size, style, and no doubt flashes of envy from onlookers.

This year's finalists sees the new Mercedes-Benz C-Class face off against updated versions of the BMW 3 Series and Volkswagen Arteon. The latter is something of a challenger from a brand more often considered as a premium mainstream player than an outright prestige car.

Technology, dynamic ability, plushness and luxury come under the microscope in the search for the best medium luxury car available in 2023.

Even a quick look at the new-generation Mercedes-Benz C-Class frames it as a formidable rival to other cars in the segment.

New looks, new interior, new safety features and some very cool user technology go a long way to justifying a stiff price increase for Mercedes-Benz's latest generation medium luxury sedan.

At the time of testing there are two C-Class variants, the C200 priced from $78,900 and the C300 from $90,400, both before on-road costs.

That’s a long way north of the previous starting point of $66,900 for a W205 C200, but Mercedes-Benz has worked hard to justify the $12,000 price rise. The performance-oriented AMG C43 has since joined the range, with an even more fierce C63 model on the way.

The new C-Class is an evolution of the W205 (2014-21), which in turn was a huge leap forward over its predecessor, the W204 (2008-14). It retains the same basic building blocks but has been refined and improved in almost every way. 

Its powertrains are exclusively mild-hybrids which means less fuel is consumed, and the interior has been overhauled to incorporate the Mercedes-Benz User eXperience (MBUX) operating system.

C200 and C300 sedans come standard with the AMG-Line dress-up kit, which includes a sports body kit, bonnet with ‘power bulges’ and AMG-style alloy wheels. This makes the new C-Class 4793mm tip to toe, which is 107mm longer than the model it replaces, and quite a body stretch considering the wheelbase has only grown 25mm to 2865mm.

With bigger dimensions than its predecessor, the new C-Class works much more effectively as transport for shuttling the whole family or important clients.

Space front and rear feels generous for the segment, and the front seats in particular offer a range of adjustability and touring comfort that is hard to fault.

Road testing revealed that the polished ride comfort pampers occupants, too, offering a plush ride over bigger hits and bumps that unsettled other firmer-riding members of the Drive Car of the Year field.

The interior imparts a premium and modern ambience, with flowing wood panels, detailed brightwork, and subtle LED lighting bleeding out from behind stacked surfaces.

The screen real estate in the cabin, with a bright 11.9-inch infotainment display and 12.3-inch digital instrument cluster, offers an unmatched degree of configurability. The user experience has been carefully honed, too, with ease of use at the fore and plenty of processor power, ensuring buyers won't be frustrated by laggy load times and ignored system requests.

Impressive safety credentials, including ten airbags, with a front-centre bag among them, and assistance aids like a 360-degree camera, adaptive LED high-beam headlamps, adaptive cruise control and a lane-departure warning system also held the C-Class in good stead. Not just their presence but their ease of use and suitability to Australian road conditions also helped here.

Picking gripes with the C-Class was a harder task, but impressive as it may be, the compact driver's footwell and some sensitivity from the brake pedal were blots on the ledger for Mercedes-Benz. And while it's hardly a deal-breaker, the relatively unadorned rear seats, compared to the amount of equipment up front, felt a little disappointing.

The new C-class has been refined and improved in almost every way. It delivers a truly modern luxury experience in a stylish executive sedan.

The BMW 3 Series has long been the benchmark for the medium luxury car category, not for its plushness, but rather its hallowed handling capabilities.

A midlife makeover launched in 2022 did little to dull the 3 Series' dynamic flair, with the current-generation mid-size BMW marking something of a return to BMW's choice as the driver's car of the category.

In testing, judges praised the communicative steering and confidence-inspiring handling balance. The trade-off is that the 3 Series has a firmer ride than was always ideal for Australian roads and can get a little thumpy on rough surfaces.

Noise insulation is where it should be, though, and there's little in the way of unpleasant engine noise or road noise – always welcomed on Australia's coarse-chip road surfaces.

Engine performance in the base 320i feels adequate, but in Comfort mode the drivetrain can be slower to respond and doesn't live up to the sport sedan expectation that's evolved with the 3 Series range over the years. Stepping up through the range, through 330i and M340i variants, however, alleviates this issue.

On the inside, the new infotainment system lifted from the flagship BMW iX integrates nicely with the carryover interior elements, with a dual-screen set-up that's almost cinematic in its size (14.9 and 12.3 inches respectively for infotainment and instruments), resolution, and richness of colour.

As visually appealing as the new user command centre is, there are some functions and menus that have been made complicated, like climate controls that move away from physical buttons and now function as a part of the on-screen display.

Despite taking third place on the podium in this race, there's much to like about Volkswagen's medium luxury challenger.

The interior is practical and roomy. Despite the Arteon having the shortest wheelbase of the three cars assembled, clever packaging means rear-seat space feels the most commodious, with easy access and decent headroom despite the coupe-inspired roof line.

The seats also felt big and broad, with room for drivers and passengers of all shapes and sizes.

Ride comfort also impressed the judging panel, with a wafting ride that is by far the most forgiving on rural roads. While still dynamically competent, the more relaxed feel behind the wheel makes the Arteon feel less sporting than the C-Class or 3 Series. Unless pushing the limits, the Arteon rarely feels any different to its rear-wheel-drive competitors, despite being the only front-wheel-drive car here.

It's also worth pointing out that while the highly configurable digital instrument display is impressive, the infotainment display can't match the slickness of its rivals. Similarly, the flip-up head-up display panel feels out of step with the high expectations of the segment, looking more like an afterthought.

You can read about all the other 2023 Drive Car of the Year categories and winners here:
Drive Car of the Year categories and winners

Note: All vehicle specifications pertain to variants tested as part of DCOTY assessment program.