The need to have 4x4 isn't at all true. So rest assured and buy the two wheel drive. Now I took would recommend the new X1. It's roomy, refined and drives very well. The Q3 has been around longer, is compact and efficient and hence has many more fans. And it drives really well. Both cars offer all wheel drive too. So I would say choose based on a) a test drive and what you really enjoy more and b) the space and cabin features. I suspect the X1 will be your choice too. Let me know what you choose either way!