Volkswagen Phaeton (2004)

"The Phaeton is a spectacular car that is almost certain to become a footnote in automotive history."
Good: luxurious, powerful,
comfort features gallore
Bad: price, jerky transmission, reliability

Our fear is that the Phaeton is like one of those early Steven Bochco TV series: brilliant, intelligent, and quickly cancelled due to lack of popular interest. The Phaeton is a spectacular car that is almost certain to become a footnote in automotive history. The head of VW apparently got sick of everybody associating Volkswagen with cheap, little cars. So he said, "Let's show everybody we have the engineering talent to build a spectacular luxury car."

The result is the Phaeton, which is mechanically similar to the long-wheel-base Audi A8 (also a spectacular car). The Phaeton is stuffed with electronic gadgetry and has comfort features galore. It's practically limousine-like, with enough room in back for a CEO to stretch out his legs and review both sets of company books.

So why don't we see a long, bright future for this car? Because it's an odd duck in the VW line up. VW makes its living selling Golfs, Jettas, and Passats. When fully loaded, these cars can run as high as - $35,000! When a sales guy who's playing games with free floor mats to move Jettas off the lot tries to engage a high falutin' customer who's deciding between a $95,000 V12 Phaeton and a Mercedes S-Class, there's a bit of a cultural mismatch. In other words, the Phaeton is not a stretch up-market for VW, it's a jump to an entirely different market. And VW dealers may not be able to make that leap.

In addition to bridging the cultural differences between luxury buyers and Golf buyers, VW also has to face the fact that lots of luxury car buyers want overt prestige. They want people to say "Hey, there's that jerk in his Mercedes S-Class." Having a big "VW" on the front of your luxo-barge just doesn't cut it for this crowd.

So while VW has now convinced us that they certainly CAN build a world-class luxury car, the question is whether they can sell one.

There are two versions of the Phaeton: an 8-cylinder for about $70,000 and a 12-cylinder for $95,000. We drove the $95,000 W12 Phaeton-with great care, we might add.

Driving Experience

The Phaeton is an absolutely wonderful car. It's luxurious and powerful. It would be an extremely nice car to drive on any kind of excursion - long or short. Hell, it'd be nice just to go out to the driveway and sit in with its expansive cabin, comfortable massaging seats, and fine stereo system. The best description of the driving experience is that it glides, and glides powerfully.

There's a five-speed automatic transmission in the V12 Phaeton. A sixth gear is available in the 8-cylinder version. That is a little odd, given that a lot of BMWs and Mercedes are going up to six and even seven speeds, and you'd think VW would do the same when they're trying to play in this league. We're guessing that space was an issue with the big engine in there. The Phaeton transmission comes with a sport mode that moves the transmission shift points higher, and does a good job of holding onto each gear longer. The result is a truly sporty feel, with the transmission hanging onto gears, even during deceleration, like a manual transmission would.

One little worry: One morning when it was cold, the transmission seemed a little bit jerky in the lower gears. Given VW's quality problems of late that gives us some pause.

On the road, cornering is very good, especially for so large a car With its fulltime all-wheel-drive system, the Phaeton handles a lot like the Audi A8, with perhaps a slightly softer suspension. All-wheel drive also makes it a good car for snowy climes. The brakes are excellent, too. The Phaeton is a little tricky to park in urban settings because it's so damn long. But that's the price you pay for driving a limo.


This is a very large car: It's long, with huge rear-seat room, long sloped rear window, and a gigantic trunk. The doors feel very heavy and substantial. Just to give you an idea of how large this car is: There's a couple of inches of room between the left side of the driver's seat and the inside of the driver's door. You can look down at the left side of the driver's seat and clearly see the seat controls. In most other cars, you have to reach down and adjust the seat by Braille. Not so with this car.

Everything you could want is available on this car: Twelve-way power seats on the V8 and 18-way in the W12. We're having trouble even thinking of 18 ways a seat could adjust! Does it spin around sideways so you can kick the passenger? The seats can be had with built in heating, cooling, and massaging options - even the rear seats. A navigation system is standard, as are just about all the air bags and safety features you could want.


Volkswagen must think that anybody in the market for an expensive car wants lots of electronics. At night, the inside of the car lights up like a Christmas tree. There are so many lights and buttons creating light inside the cockpit that we found it to be somewhat distracting. During the daytime, the complexity is still there, but at least your pupils aren't offended. There's also a screen to control everything from temperature, to navigation, to the radio. The screen has an enormous number of functions, and requires more of your brainpower than it should while you're driving. You can turn it off, but every time you restart the car, there it is again! For $70,000, you should be able to decide - yourself - whether you want a giant screen on your dashboard. Give us simple radio and ventilation controls, and leave the screen for controls used less often.

One other note, unlike its sibling, the Audi A8, the Phaeton has no provision for satellite radio. Of all the new, "gee whiz" electronics you can get these days on cars, that's one that we actually WOULD want. And we suspect other luxury buyers want it, too. Hopefully, VW will fix this oversight for 2006, since we wouldn't want Butchie at Circuit City drilling holes in the dashboard of our $70,000 luxury car just so we could catch NPR on Sirius.


The Phaeton is a substantial looking car. We like it. It doesn't have a lot of bling. It's just solid, muscular, and handsome. Some people have complained about the large VW emblem on the front grill. But what do you expect them to do, hide it? It's not highly stylized, but it's smart looking. It's not going to go out of style. And if you're someone who likes to enjoy your luxury quietly, without showing off and calling attention to yourself, this is a car for you.


There won't be a lot of these cars sold, so even your VW dealer is going to have to get out the manual when you come in for service. Suffice it to say, when you spend 70K and up on a car, you're not going to let Vinnie, at the corner gas station, learn on it. So expect dealer servicing at dealer prices. Add in the flagrant use of electronics on this car, a shoehorned V12 engine on some models, and you can expect to spend luxury car money on servicing.


VWs in general, are not among the planet's most reliable cars. And lately, they've been going through a bad spell, with electronics issues and oil burning. They probably take more care building the Phaeton than they do the Beetle, but with so much electronics and automatic height control, etc., etc., we're not prepared to vouch for the reliability of this car. We're especially reluctant to suggest someone spend this kind of money on a car whose reliability is still unknown. We urge caution. Or leasing.

Overall comments

The Phaeton is a wonderful car. You get in it, step on the gas, and it's easy to feel like you're one of those who owns the means of production, if you know what we mean. It's a sweet car to drive, or be driven in.

That said, we have a hard time recommending it. We don't know how long it's going to be around, so we don't know how long VW dealers are going to be committed to it. Add to that the fact that relatively few of them will be produced, and you may have a car that nobody wants to service after a while.

Our other concern is quality. The VW Touareg we tested last year had a mysterious battery problem and a ride-height warning light that came on intermittently. The VW Eurovan we drove had a balky temperature sensor. And even this Phaeton - the $95,000 V12 Phaeton-had a navigation system that appeared to be suffering from dementia. Unless you're a risk taker, or you get an unbelievably good deal on one, you're probably better off buying an Audi A8L. The A8 has many of the same excellent qualities and is in the Audi line up for the long haul.

Having said that, it's entirely possible that you CAN get a great deal on a Phaeton. At the end of the 2004 model year, Volkswagen took $10,000 off the Phaeton's price tag to get rid of the unsold 2004s. That sent the V8, after some mild negotiating, out the door for about $55,000. At that price, it's a deal. You're basically getting the equivalent of a loaded Audi A8 for the price of a loaded A6. Or the price of a Mercedes E Class, BMW 5 Series, or any number of cars one class smaller than the Phaeton. Will that kind of pricing come back again in 2005? We don't know. It depends on how well the Phaeton sells, and whether VW adjusts production. But it's worth keeping an eye on the incentives. And it wouldn't surprise us if VW needs to discount Phaetons again.

If the price goes down, then the Phaeton is worth considering. Because it is a helluva nice car. But at $70,000 plus, it's hard to get over the quality concerns and the questions about future servicing and resale value. When you dump 70 large on a car, that's the kind of stuff you shouldn't have to worry about. For $55,000, however, we might be willing to accept a little worrying.

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