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Sometimes buying a full-size luxury car is worth every penny, as with the Volkswagen Phaeton and the Mercedes-Benz S550. Unfortunately, the Phaeton wasn’t long for this world, but in its short time trounced all disbelief that Volkswagen was incapable of creating a premium luxury sedan. Though it didn’t quite reach the pedigree that anointed brands like Bentley or Jaguar, it indeed came close. Here’s how it fared against its competition, the Mercedes-Benz S550.

Volkswagen Phaeton

Volkswagen on display in Frankfurt
Volkswagen on display in Frankfurt | Sean Gallup/Getty Images

The Volkswagen Phaeton was the adult version of the Passat that unfortunately faded into obscurity by 2016. It was big, heavy at 5,200 pounds, and awesome. Gen 2 customers could choose three different turbocharged engine options, each mated to an all-wheel drive configuration. 

It came with a laughable V6 that pumped out 280 horsepower or a slightly better V8 rated at 335 horsepower. However, the W12 was the engine to get. It had a displacement of 6.0-liters and made 450 horsepower. There was also a V6 diesel option that produced 240 horsepower.

As a whole, Phaeton owners love their cars, according to Carbuyer. Owners with V6-equipped Phaetons cite staunch reliability, excellent acceleration, and Bentley-rivaled comfort, as well as good gas mileage. That said, there may be a few electrical gremlins to work out, especially when considering an early-2000s model. 

Unfortunately, the Phaeton didn’t last because it was, after all, a $100,000 Volkswagen. Phaetons with the 12-cylinder engine started at $96,000 when they first came out, and early W12 models are selling for around $25,000. 

Mercedes-Benz S550

Mercedes-Benz S550 driving in New York City
Mercedes-Benz S550 driving in New York City | Jemal Countess/WireImage for Saks 5th Avenue

One of the Phaeton’s closest competitors at the time, and one of the luxury cars it set out to beat, was the Mercedes-Benz S550. This Mercedes had a twin-turbocharged 4.7-liter V8 that sent 450 horsepower to the rear wheels or all four if customers selected the 4Matic option. 

The S550 started at around $96,000, so comparable to the Phaeton’s MSRP. The Mercedes tipped the scales at 4,773 pounds and came with Airmatic suspension. Customers could choose the Magic Body Control, which adjusted the suspension based on the road it was driving on. 

Some reviewers pegged the S550’s steering as light, but it still earned a nimble handling evaluation. The S550 rides silky smooth and does all of the driver’s work for them, making it the most effortless driving experience. These were hit with depreciation as well, though not as severely as the Phaeton. Nowadays, the S550 is worth about half of its original MSRP, at around $40,000.

Which one should you choose?

Volkswagen Phaeton on display in the Dresden factory
Volkswagen Phaeton on display in the Dresden factory | Ralf Hirschberger/picture alliance via Getty Images

If money is no object, you can’t go wrong. It’s German luxury, which is challenging to beat. However, the Phaeton will deliver more bang for the buck. It provides superb comfort and acceleration, and by almost all accounts, is supremely reliable. Volkswagen did right by the Phaeton and indeed by the full-size luxury class.


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