Not too long ago, a large family car was rarely an object of desire; it was built to carry a family in comfort at an affordable price. Few were handsome or stylish, and following the rise of the SUV, they’ve faced a tough test.

But now there’s a group of sleek family cars fighting back. Peugeot’s new 508 Fastback is the latest challenger and it’s targeting premium rivals such as the Volkswagen Arteon.

Best executive cars

Both models are more premium alternatives to regular family saloons, yet while these cars are designed to appeal to buyers’ sense of style, they still have to offer enough space and usability for family and work life, to match the core strengths of their mainstream counterparts.

When we tested the mid-spec diesel 508 (Issue 1,546), it fell behind rivals because it was pricier. However, here we’ve lined up the more upmarket VW Arteon in petrol automatic form to see how well the Peugeot compares.

Both cars’ sporty looks are matched by the trim levels we’re testing them in, GT Line and R-Line respectively, and with petrol engines, buyers will expect them to be good to drive, too. But which is the better all-rounder?

Peugeot 508

The new 508 Fastback has a clear focus on sharp looks and an upmarket interior, but is that enough to win here? We’re testing the GT Line version, which costs from £31,239 with the 179bhp PureTech petrol engine and an automatic gearbox.

Design & engineering

With its bold grille and prominent headlights and tail-lamps, the 508 is one of the most distinctive cars in its sector, and is quite clearly born of the same design language as its sister 3008 and 5008 SUVs. In this class, it is only really rivalled by the Arteon.

It uses MacPherson-strut front and multi-link rear suspension, matching its rival here, and like the VW it is also available with adaptive suspension. However, on this PureTech 180 model, the suspension is passive as standard, with the adaptive set-up an £820 option.

At £31,239, it’s cheaper than the £34,590 Arteon in equivalent R-Line trim. That puts the Peugeot at an advantage when it comes to value for money, because standard kit is generous in GT Line spec.

Satellite-navigation is included, along with Apple CarPlay and Android Auto, climate and cruise control, a 12.3-inch digital instrument cluster, front and rear parking sensors and autonomous braking. There’s also wireless phone charging, LED lights, keyless go and a reversing camera. It’s slightly better equipped than its rival because the latter two are extra on the VW.

Material quality in the 508 isn’t quite as good as in the VW, though, with some shiny plastic surfaces that attract fingerprints and feel a bit cheap. But that’s offset by the fabric on the doors and dashboard, which is very upmarket. Also, the 508’s cabin has a very attractive design that is centred upon the large 10-inch touchscreen infotainment display.

Driving

Unfortunately, one aspect of the interior that doesn’t quite work is the driving position. The tiny steering wheel that sits below the digital dash is set too low and it feels unnatural in a large car like this. While the i-Cockpit layout is effective in models such as the 3008, where the seat is set high up, it frustrates here, particularly for tall drivers.

The small steering wheel and fast steering make the car feel agile, and the 508 handles well enough to keep up, but there’s a lack of precision that means it’s not as easy to place on the road as the VW.

The 508 deals with most road surfaces pretty well, and in Comfort mode is almost as relaxed as the Arteon is on adaptive dampers. Going over big potholes is harsher in the Peugeot than in the VW, but both cars mask undulations in the tarmac and smaller bumps nicely on the motorway.

Its 1.6-litre petrol engine is well isolated from the cabin, too, so it’s refined at speed. The motor sounds strained at higher revs, however, and since the unit produces its maximum 179bhp at 5,500rpm, you’ll need to push it harder than the Arteon; its larger 2.0-litre motor delivers 187bhp at 4,180rpm.

In our performance tests the 508 was 0.9 seconds slower than the Arteon from 0-60mph. The VW has a launch control feature that maximises its getaway the line, while its DSG gearbox shifts much faster than the auto box in the Peugeot. Due to its lower power and torque figures, the 508 was slower in our in-gear tests, too, but performance is still adequate.

The French model’s gearbox slurs its shifts more than the VW and is better for it much of the time. The smoother shifts mean making gentle progress is easier and more comfortable in the 508.

Practicality

While both cars look like they might have a saloon boot, they’re actually hatchbacks. There’s a similar amount of space in both at first glance, but the stats reveal that the 508’s 487-litre luggage space is the smaller of the two, because the VW has 563 litres available. Both are easy enough to load, thanks to their wide openings.

The Peugeot also falls behind the Volkswagen for rear passenger space, because there’s not as much head or legroom. Both cars are spacious enough for adults to sit comfortably, however, but their sloping rooflines result in smaller rear windows, so there’s not much light in the back.

Ownership

Safety kit is a strong point for the 508, with autonomous emergency braking, lane-keep assist and distance alert all standard. Also included is the Safety Plus pack, which adds blind spot detection, an alertness monitor, automatic high-beam headlights and road sign recognition.

Euro NCAP hasn’t tested the 508 yet, but we’d expect a strong result. Peugeot scored poorly in our Driver Power 2018 customer satisfaction survey, with the brand finishing 17th out of 26 manufacturers and coming 17th out of 28 in the dealer poll.

Running costs

The 508 is cheaper to buy than the Arteon and also emits less CO2, at 125g/km. The Peugeot sits in the 26 per cent Benefit-in-Kind (BiK) tax band. Many of these large family models are run as company cars, so the BiK rate is a key factor here. Higher-rate earners will pay £3,226 per year to run the Fastback, whereas the pricier Arteon will cost buyers £3,845 a year in tax contributions.

However, the Volkswagen will depreciate less, so its residual value will be higher after three years’ ownership. Yet because it’s pricier to buy in the first place, you’ll still lose more money during that time: £17,714 in the VW and £17,347 in the 508.

Volkswagen Arteon

The Volkswagen Arteon has beaten premium models such as the Audi A5 Sportback and BMW 4 Series in previous tests, but in that company it was a good-value choice. At £34,590 in R-Line trim here, it’s the more expensive model this time, so is it worth the extra cash compared with the 508?

Design & engineering

Just as the 508 is based on architecture that underpins many models in the Peugeot line-up, the Arteon uses the versatile MQB platform, which is shared with Volkswagen cars such as the Golf.

As with the 508, the VW uses MacPherson-strut suspension at the front and has a multi-link rear set-up. Our test car was fitted with optional adaptive dampers (£820), which can be configured to deliver a softer or firmer ride depending on the drive mode you select from behind the wheel.

The engine is a 2.0-litre four-cylinder petrol turbo that produces 187bhp and 320Nm of torque, and is linked to a seven-speed dual-clutch automatic gearbox. So while the Arteon is more expensive, you do also get an extra 8bhp and 70Nm of torque. However, at 1,601kg, the Volkswagen is also the heavier of the two cars; the 508 weighs in at 1,420kg.

This R-Line model matches up to the 508 in GT-Line spec, and offers parking sensors, sat-nav, adaptive cruise and climate control, heated leather seats and LED headlights. On the technology side, there’s Bluetooth, smartphone connectivity, DAB radio and a 12.3-inch digital instrument cluster.

The top of the dash and the door cards are made of soft-touch materials, with harder plastics only really found lower down, where you’ll rarely come into contact with them. That, along with the excellent infotainment system, means the VW feels slightly more upmarket than the 508, but the design is drab in comparison. The driving position is much better, although you do sit slightly too high up.

Driving

The Arteon’s larger steering wheel and precise steering set-up mean that while it doesn’t have a lot of feel, it’s the more natural car of the two to drive, and also the greater fun. It has lots of grip and the engine is more vocal than the Peugeot’s, emitting a nice rasp when you rev it, but staying quiet when you don’t.

The VW performed significantly better in our track tests, too; it was nearly a second faster from 0-60mph, and took just 6.6 seconds from 30-70mph through the gears. The 508 needed 7.9 seconds, because its auto box doesn’t shift as quickly as the Arteon’s. However, the Peugeot’s slower shifts improve comfort at lower speed; the VW’s DSG sometimes clunks into gear when slowing down and speeding up again, for example at a junction.

In manual mode the DSG is much better, though, because it responds quickly to inputs, and the more powerful engine makes the most of each ratio. The Arteon took 3.5 seconds to go from 30-50mph in third, a second quicker than its rival, and 12.2 seconds to cover 50-70mph in seventh (1.4 seconds faster).

Adaptive dampers are a worthwhile extra, because in Comfort mode they even out rough roads well. Large potholes upset it a bit, but the VW is marginally more comfortable than the 508 overall in this setting.

However, switching from Comfort to Normal or Sport modes undoes this, because there is almost no change to the handling, yet the ride does become uncomfortable as the dampers firm up.

There are loads of fine-tuning options if you select the Individual mode, so it’s possible to have the powertrain in its sportiest option and the dampers in their most comfortable setting.

Practicality

The Volkswagen has a bigger boot with the seats up, as well as a larger total volume with the rear seats folded, although at 1,557 litres, it’s only 20 litres up on the 508 in this configuration. A powered tailgate is a pricey choice, at £900; that is more than twice what the same option costs in the 508, although it’s not difficult to open the boot, so it’s not worth the extra for most people.

There’s more space inside the Volkswagen for occupants than in the Peugeot, both in the rear and up front, where the cabin feels lighter and less cramped, thanks to the smaller centre console.

A full-size spare wheel is included as standard in the Arteon, while you’ll have to make do with a space-saver tyre that is limited to 50mph if you have a puncture in the Peugeot.

Ownership

In our Driver Power 2018 satisfaction poll, owners ranked Volkswagen in fifth place overall, out of 26 brands, which was a much stronger result than Peugeot’s 17th.

The VW also achieved a five-star rating from Euro NCAP when it was crash-tested. Standard safety kit includes autonomous braking with collision warning, lane-keep assist, adaptive cruise and seven airbags. However, blind spot assist (which is standard on the 508) is part of a £510 option pack.

Running costs

The Arteon and 508 were close when it came to fuel economy on test; the VW managed 39.2mpg, while the 508 returned 37.6mpg. That works out at an annual petrol bill of £1,809 and £1,886 respectively over 12,000 miles.

While there is only a small difference in what you’ll pay at the pumps each year, the Arteon’s higher list price means the German model is not as cost-effective to run as its French rival over a typical ownership period, because you’ll lose more money in depreciation or pay more company car tax.

Results

First place: Peugeot 508

It’s a close result, but the Peugeot is better equipped and, crucially, cheaper to buy and run than the Arteon. The French car is also comfortable and refined, so it squeezes into first place here. The 508 is very nearly as practical as the Volkswagen, too, while offering lower running costs. It makes the most sense as an automatic, because the PureTech 180 petrol engine is quiet and punchy.

Second place: Volkswagen Arteon

The Arteon is better to drive, more comfortable, more spacious and faster than the Peugeot – but only slightly. Running costs and price combined are crucial for cars such as these and this greater disadvantage here is where the Arteon starts to trail its French rival. It’s a marginally better car than the 508, but its loftier price and less kit mean the VW drops slightly behind.

Other options for similar money…

New: Audi A5 Sportback

Model: Audi A5 Sportback 2.0 TFSI Sport Price: £35,915 Engine: 2.0-litre 4cyl, 187bhp

It’s pricier than both cars in this test, but the Audi A5 Sportback is stylish, good to drive and has a superb interior. It shares its engine with the VW, so it delivers similar performance. Strong residuals mean it may be more affordable on a PCP than you’d think.

USED: Alfa Romeo Giulia

Model: Alfa Romeo Giulia 2.0 Veloce Price: £32,490 Engine: 2.0-litre 4cyl, 276bhp

If style is your thing, you can’t go far wrong with an Alfa Romeo Giulia. Buy used and for this budget you can afford a Veloce, which mixes comfort, handling and performance, so the Italian saloon is even harder to ignore. We saw one with delivery miles for just £28,998.

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