I think I should chime in on behalf of the A4 crowd. It is true, an S4 with sports diff is a completely different experience than an A4. However, in most cases, the A4 is just as sporty (if not more so) than the S4 without the sports diff. It has all the same mechanical parts if you get the S-line, and there is less weight hanging off the front axel if you get the 2.0. Also, the 2 litre with stage 2 may only make about 240awhp, but it makes well over 300awtq, which is pretty fun and sporty (especially considering the cost of tune + HFC + install is only $1200). If that is not enough, the k04 is a very cheap upgrade that will not only give you a very fat power band, but it's acceleration should be similar to a STOCK (non tuned) S4. A tuned S4 is a different story altogether. All the suspension mods are the same between the two as well. Now, for people like me who are speed freaks and power junkies, an S4 made more sense, but I needed the Avant. Thus, I ended up with an A4. However, plenty of people in the A4 crowd have moved up for the very reason that the A4 was simply not fast enough, even when tuned. And admittedly, even if you get a bigger turbo, that supercharger whine screaming like a banshee with ~400hp under the hood is something the A4s can never touch. However, for others, a simple stage 1 tune on the A4 was plenty to make them fall in love with their car. Ultimately it comes down to this: are you looking for fun, or speed? If you are looking for a torquey and engaging car, the A4 is more than enough. If you are looking for speed, then no contest, S4 is worth the price premium.
There is one factor though I am surprised not many have mentioned here. The S is a very special and exclusive car. You don't see many of them on the road at all, but A4 sedans are everywhere. Just driving it feels special because you know there isn't one right around the corner. That alone is worth the premium to some.
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