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Model S Vs Model 3 Interior Space

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It should be fine, plenty of space. The only thing I would note is that the Model 3 is not a hatchback. But for passengers it's great.
I don't really see much appeal in the Model S as it stands. Not distinctive enough and I would argue the Model 3 is much better than my X in a lot of ways.
 
I previously had a 2013 S P85+. The front interior area in my opinion is so much better with having door pockets, better drink holders and a better center console. The rear seating area is smaller but not bad. A lot would depend on the legroom needed for the third adult.

I assume you have the large frunk so that would depend on how much you use it. We can fit a large duffel bag and a couple of small backpacks in the M3 frunk but it's smaller. Obviously the trunk is smaller but still holds a good amount items. When my son was an infant I remember having a ton things we needed to take with us including a stroller and that might be a deal breaker to switch to a M3.
 
I have a 2014 S 85 and my wife has a LR RWD 3. I'm picking up my own base SR 3 this Friday and trading my S in. The 3 feels so much better to drive and her 3 has become the family car because of the range that my S has become a commuter. Not worth having it for that use. I might miss autopilot, but again, her 3 is the one we take when we do long drives which is when autopilot is primarily used.

In our experience, the 3 fits our 2 kids and their carseats just as well as my S. The trunk and frunk space are definitely not as big as the S, but it hasn't been a problem with her car so far.
 
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Found this table comparing the interior dimensions of the Model S vs. Model 3 and as you can see, they’re basically the same size +/- an inch here and there
 
Really want to trade in my 2014 S for a new 3, but thinking how big is it inside? How much real space it has for a family of 3 adults and infant, any real world owners who trade in their S for 3?

I have both an S and a 3. If you're thinking about storage space, the S wins hands down, largely because it's a hatchback. For example, I can put my entire recumbent trike with only the sear removed in the back of the S (with the rear seats folded down), plus luggage and other large items (photo below). That's not possible with the 3, but may be possible with the Y.

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View attachment 429356 Found this table comparing the interior dimensions of the Model S vs. Model 3 and as you can see, they’re basically the same size +/- an inch here and there

Judging from this comparison, Model 3 is better for taller people as it has more head room and skinnier? people as less hiproom implies smaller seats?

I drove Model S for couple of weeks and for me Model 3 is more spacious, not saying more interior room but feels romier, like open space in the house with no walls. Best way is to go to a Tesla showroom and spend time in both if possible.
 
Judging from this comparison, Model 3 is better for taller people as it has more head room and skinnier? people as less hiproom implies smaller seats?
I have owned an S (which I traded in for an X) and now own a 3. I’m 6’2” and the amount of headroom in the 3 is remarkable; I have several inches to spare. I had no problem with headroom in the S. The 3 cabin subjectively feels roomier up front than the S, I think because of the higher windshield and lower dash. The 3 rear seats aren’t quite as spacious but do have more headroom.

The S of course has a lot more cargo space than the 3. But I like the smaller overall size of the 3.

The S has many advantages over the 3, not just the hatch. And it looks great. I prefer smaller cars, and inside the 3 feels very spacious, plus the handling is better. Bottom line, it’s more fun to drive in my opinion, but it certainly lacks a lot of fancy stuff that the S offers, including the air suspension.

There are always trade offs.