I made the 'exact' move just 2 days ago. I traded in my B8.5 S5 (same car with less room than the S4 lol) to move to a 2019 S3 instead. I did it for the much more lively smaller lighter car. The fuel economy was a nice perk when looking at it since I averaged 21mpg in my S5 (stage 2 manual car). The S5 was quieter by a good bit and I'll miss that along with the instant and large wall of torque it had. The S3 is quiet enough to still be happy with of course, but you'll likely notice it at first introduction since it might be quite noticeable depending on your S4 mods. My S5 had the stock exhaust on it as does the S3.
The S5 handled well but I'm used to cars that weigh very little (sub 3k pounds all the way down to 2200 pounds) so the weight was ALWAYS noticeable and it wasn't a very lively car, more like a brute that punishes the road to it's will. That was phenomenal for highway drives, but not that exciting for curvy roads that aren't sweepers. The S3 is MUCH more fun to drive even though it's not a manual, it turns in far more quickly, changes direction quicker, and in general is just more exciting on a curvy road while still being good on the highway.
Fuel economy is laughably better than the S5 was, but it won't be as good as my old mk7 GTi's were because the S3 is heavier and probably less aerodynamic, but it's still very good.
If tech matters to you then it's not even a fair comparison between the B8.5 and the S3 (depending on the year and trim of the S3). Mine has the digital cockpit and all that wizardry.
I strangely prefer the seats in my S3 to the sports seats in my S5. I have the quilted nappa leather seats in the S3 and they're very comfy even though the adjustment is manual (besides lumbar) and they don't go AS low as the S5 did. I miss memory seats haha.
I have more fun getting on it in the S3 since it's stock and I can get on it a whole lot more often without risking nearly as much as you do in a stage two S5/S4.
If you NEEEEEEEEEED a huge trunk or big backseats then the S3 is the wrong car for you and maybe look at the Golf R if you still want the size, weight, and fun of the car. I clearly didn't need it since I had an S5 and an NC Miata as a combo haha. (Miata is still here)
Feel free to ask me any questions you might have.
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