@b0rk I never do this, but for a side-by-side diff, try

git difftool --tool=vimdiff --color-words --no-index <path> <path>

(You can usually leave out `--no-index` with git-diff (according to the docs, "You can omit the --no-index option when running the command in a working tree controlled by Git and at least one of the paths points outside the working tree, or when running the command outside a working tree controlled by Git"), but with git-difftool, apparently you do still need it)