Volkswagen calls its new Passat-based midsize sedan the CC, or Comfort Coupe. You could also call it a Coupe Compromise—or, to be precise, a four-door sedan with coupe-like looks and fewer sacrifices than a true coupe for the sake of design.

The 2009 Volkswagen CC also stands out with a classy interior and an upscale price to match—starting at $27,850. That’s akin to larger sedans—about $1,000 less than the Toyota Avalon, for example, and within $5,000 of luxury rides such as the Audi A4.

As such, it’s hard to peg competitors for the CC. What it brings to mind is the Mercedes-Benz CLS, a stunning sedan with coupe-like lines that drew raves when introduced for the 2006 model year. Starting at nearly $73,000, however, the CLS is in a class of its own.

Still, the VW’s interior is on par with entry-level luxury cars, even in the base Sport model we tested. The only upgrade on our car was the $1,100 six-speed automatic transmission with Tiptronic manual mode and satellite radio.

As a testament to the CC’s design, my friend’s teenager Anna was excited to ride in the “sports car.” And again, the performance in the base car matches that sleek look.

The Sport comes with a spunky 4-cylinder, 2.0-liter, 200-horsepower turbocharged engine. With the standard six-speed manual transmission, zero-to-60 time is 6.9 seconds, according to Volkswagen. Fuel economy is surprisingly good, considering that level of power—21 miles per gallon in the city, 31 on the highway with the manual tranny.

Standard features on the Sport include power seats, heated seats, air-conditioning, cruise control, remote locking, CD changer with MP3 capability, and heated mirrors. And although the seats are leatherette (a.k.a. vinyl), they will fool many passengers (only touch gives it away) and can be had in a two-tone design at no extra cost.

Safety equipment includes antilock brakes, stability and traction control, side airbags and curtains, fog lamps, and tire-pressure monitor.

You can upgrade the standard equipment with the Luxury model—and up the engine to a 3.6-liter V-6, taking horsepower to 280 and the zero-to-60 sprint down to 6.6 seconds. It only comes with the automatic transmission and is the only option if you want Volkswagen’s 4Motion all-wheel-drive system.

That V-6 upgrade, however, doesn’t come cheap. The VR6 Sport starts at $38,450, while the VR6 4Motion goes for an eye-popping $40,550, including destination charge. At that price, you could buy a loaded Audi A4 or BMW 3 Series.

As an alternative to Volkswagen’s midsize Passat sedan, however, the CC is an attractive option. The Passat’s base is nearly $1,500 more than the new CC with the same upscale flair and a few more sedan comforts.

The CC’s sleek design means you sit a little lower and lose some backseat room. The sloping roofline chops off headroom, and the interior gives you just two contoured bucket seats in back separated by a center tray with cup holders and storage. The seats fold to extend trunk space, which is deep but shorter in height than most sedans. Legroom is OK, but the CC lags most midsize sedans in the area.

While other sedans tend to look rather staid in comparison to the CC, they are significantly cheaper, and some, such as the Nissan Altima and the Mazda6, also have a sporty feel behind the wheel. The Mazda, for example, starts at about $20,000, while the larger Toyota Camry starts at a few hundred dollars more.