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Ha. I was in a similar boat here. I had a 2001 A4 2.8 quattro. Got rid of it a while back and wanted a V8 S4. I ended up buying a 2006 A4 Avant quattro with a 2.0 turbo. I LOVE this engine. It just feels right. Not a huge amount of lag, good power everywhere. It is no V8 and will never be confused with one but it is definitely faster than the 2.8 was, no question. And I'm not even chipped.
In mixed city and highway driving I end up about 25 mpg. Try that with a 4.2 V8.
Also, to answer a question you didn't ask - the newer car is WAY better in the handling department than the 2.8 was. Feels better balanced even though it is still not a light car. Doesn't push as much in corners as the B5 chassis did.
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Nate
Gone: '86 Carrera coupe
Current: a $75 BMW 320i
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