When the Vatican came to choose a car for Pope Benedict XVI, it beat a path to the Volkswagen showroom. With a pretty generous company car budget and a need for something large, comfortable and discreet it found the VW Phaeton fitted the bill perfectly.

Launched in the UK in June 2003 the Phaeton is VW’s latest attempt to break into the lucrative luxury car market. It hoped its clever engineering, superb build quality and underpinnings (it shares its chassis with the Bentley Continental GT) would secure it a place on the driveways of the UK’s most discerning buyers.

But it didn’t. Within 12 months it was obvious that while customers were prepared to pay a little more for a VW Golf than a Ford Focus, when it came to luxury cars the VW badge carried little weight. To bolster sales, generous discounts were offered on new cars and as a consequence secondhand values slumped.

Nearly four years on, some of the doom and gloom that surrounded the Phaeton has started to lift. Secondhand values have levelled off and good used examples now fetch similar money to BMW, Mercedes-Benz and Jaguar offerings. More importantly the Phaeton fulfils its potential in build quality and refinement without the baggage of a flash badge on the bonnet.

The car has a similar line up of engines to the Audi A8, its VW-owned stablemate. The entry-level 3.2 litre V6 petrol was initially available only with front-wheel drive but in May 2004 it came in line with the rest of the range, gaining 4Motion all-wheel drive. Despite a healthy 237bhp on tap the 3.2 litre struggles to propel the Phaeton’s 2,720kg in the relaxed fashion that most luxury car buyers expect. A similar story is true of the 3 litre 222bhp diesel, although fuel economy approaching 30mpg in mixed motoring is compensation enough for many.

At the top of the pecking order is a 5 litre V10 diesel, also found in the VW Touareg, and a 6 litre W12 petrol. Both units deliver incredible levels of power, with 305bhp and 444bhp respectively. The W12 is something of an automotive masterpiece, endowing the Phaeton with sledgehammer-like performance: 0-60mph in under 6sec and a theoretical top speed (it’s restricted) of more than 180mph. But power does not come cheap and owners report fuel consumption hovering around the 10mpg mark if the car is driven with gusto. Faring little better is the V10 diesel, which in reality struggles to reach 20mpg and with its weight tends to cause the car to understeer when pushed. Which leaves the unsung hero of the range, the 4.2 litre V8. With 330bhp it is plenty powerful enough, sounds great and returns about 21mpg in mixed motoring.

The choice of engine size does affect the list of equipment but all cars are well specified with standard equipment including a four-zone electronic climate control, leather upholstery, electronically controlled suspension, electric front seat adjustment and a very impressive stereo complete with six-disc CD changer. Curiously, satellite navigation remained a relatively expensive option on all models until May 2005.

From the outside the Phaeton looks rather like a slightly stretched Passat and those extra inches translate into a very generous cabin. Front and rear legroom is superb and there is even the option of a LWB model which adds nearly 5in of legroom. At 500 litres the boot is about par for the course, though the absence of a folding rear seat does restrict its flexibility.

On the road the Phaeton is happiest when munching the motorway miles, but its size and weight mean it is less happy on the bends, despite the grip offered by the four-wheel drive. The best way to enjoy a Phaeton is by letting it waft you, near silently, along the road in a haven of wood and leather protected from the outside world by its double-glazed windows.

While the Volkswagen Phaeton may never achieve the sales that VW had hoped it does prove that the company can build impressive luxury cars. If badge snobbery is not a game you want to play then maybe a used Phaeton will fit the bill.

Four-wheel drive 4Motion system makes Phaeton sure-footed and safe but can cause higher than average tyre wear

Rear seat Large rear seat accommodates three in comfort but the Phaeton could also be specified with two individual rear seats, reducing its practicality for some buyers

Servicing Variable service interval. Check books and invoices to confirm the work has been completed by a VW dealer

Security A maximum five stars in Thatcham’s new vehicle security ratings, thanks to laminated side glass, interior alarm, inclination sensors, immobiliser, deadlocks and antitheft wheel bolts

Long wheelbase Provides nearly 5in extra rear legroom together with controls for rear climate control

Stereo Standard unit comes with 10 speakers and 190 watts of power and there was the option of an upgraded 12-speaker system with 270 watts

Interior Arguably the finest build quality of any car interior so be critical of any damage that could be expensive to repair

Parking aid Standard on all cars since May 2005

The internet fast lane

Visit www.timesonline.co.uk/ingear for reviews of more used cars

VITAL STATISTICS

Model VW Phaeton 4.2 V8 4 Motion

Engine 4,172cc V8

Power 330bhp

Transmission Six-speed automatic

Fuel 21.7mpg (combined)

Acceleration 0-62mph: 6.9sec

Top speed 155mph (limited)

The one to buy

VW Phaeton 4.2 4Motion 2003 53 with 30,000 miles. Pay £25,250 at a VW dealer or £23,000 privately

Values

Mileage 20,000

2003 53

Trade and retail values with mileage of 20,000,30,000 50,000

Trade £23,200 £21,900 £19,300

Retail £26,500 £25,250 £22,750

2004 54

Trade and retail values with mileage of 20,000,30,000 50,000

Trade £25,350 £23,850 £20,950

Retail £28,750 £27,250 £24,500

2005 05

Trade and retail values with mileage of 20,000,30,000 50,000

Trade £27,850 £26,050 £22,900

Retail £31,250 £29,500 £26,500

Or for similar money

2003 03 Mercedes-Benz S 430

2003 03 Audi A8 4.2 quattro

2003 53 Jaguar XJ 4.2 SE

2003 53 Lexus LS 430

2003 53 BMW 745i SE