A hatch is no match for class: Mark Bishop on the joys of driving a used luxury saloon in the city

On-the-ball motorists are discovering that a secondhand luxury saloon often provides a better solution to the challenge of urban transport than a brand new economy hatch.

Other than the marginal advantage of being able to squeeze into tighter parking spaces, a hatch is no match in town for a comfortably mellowed BMW or Jaguar.

Prestige motors such as BMW's 7-series, Jaguar's XJ6 and Mercedes' mid-range E-class and range-topping S-class are rarely bought new without a lengthy list of luxury features which make them ideal for city traffic.

You'll find a smooth-shifting automatic gearbox - something offered by few economy cars, even as an expensive optional extra - which makes light work of stop-start traffic, and powerful air conditioning, to keep the cabin cool while drivers of lesser tin boxes fry.

The seats are broad, firm and supportive; if you have children, there's plenty of space in the back for them and their clobber. The stereo system will rarely be a run-of-the-mill item: expect a six-speaker Blaupunkt at the very minimum and, if you're lucky, a multi-play CD in the boot.

Throw into the equation the effortless acceleration and refined cruising abilities that come with having three times as much power under the bonnet as the average supermini, and the undoubted safety advantages that accrue from the extra bodywork, and it's clear that a big car does a better job of tackling city traffic than a small one. What most people don't know is that the two can be run on much the same budget.

Whatever envious neighbours may tell you, the fuel bills for a big saloon needn't be horrendous. Six-cylinder BMWs, Jaguars and Mercedes manage roughly 20mpg in town; a mid-range supermini delivers closer to 30. For a town dweller's typical 7,500 miles a year, the difference is pounds 300 per annum.

Insurance for prestige motors becomes affordable once the driver passes the magic age of 30. Limited mileage policies aimed at urban motorists are available from Norwich Union and other companies. These can slash the fully comprehensive premium for a typical 35-year-old in a BMW 735i to less than pounds 600 - typically pounds 300 more than he or she would pay on a Mondeo 1.8. Servicing costs are surprisingly reasonable, too. A Jaguar service might cost pounds 250, compared to a hatchback's pounds 120, but it comes round only once every 7,500 miles, instead of every 6,000. BMWs demand attention at flexible intervals which depend on driving style: treat them gently and they'll go 9,000 miles between stop-offs. A used luxury car can be serviced by cheaper, independent dealers without invalidating its warranty.

Although these retired directors' cars have often covered monumental mileages, they're designed to cope. Test-drive a 120,000-mile Mercedes 5-class back-to-back against a 50,000-mile Cavalier and, pound to a penny, the Mercedes will feel the tighter, fresher piece of machinery. Parts costs are higher but, given the standard to which they are engineered, you won't need many.

But the luxury cars' trump card is this: you can buy a three-to five-year-old fat cat for pounds 12-pounds 14,000, safe in the knowledge that its previous, board-level owner has already written off at least pounds 20,000 in depreciation. In the next three years your wheels may shed pounds 1,500 in year one, then pounds 1,000 a year in the next two. A brand-new, pounds 13,000 family saloon will lose at least half its value - twice as much as the used limo - in the same time.

Image is important in this market. Ignore Vauxhall Carltons, Rover 800s and Ford Granadas: they're too small, slow and unrefined to mix it in this company and will be worth little at trade-in time. Steer clear of bodykitted and modified cars - Mercs especially - as many will have been abused by wide-boy owners.

Avoid gas guzzlers. Be wary of big cars with more than six cylinders: with the exception of recent BMW and Mercedes V8s, you'll pay a hefty fuel consumption penalty. Jaguar's newer 3.2 and 4.0-litre engines are less thirsty than their predecesors. Vauxhall's much under-rated Senator 3.0CDi 24v has a 'dual ram' engine which changes its configuration at low revs to give better economy.

Beware of clocking. Few directors' cars cover less than 20,000 miles a year; many notch up 50,000 or more. Yet many three-year-olds turn up on forecourts with enticingly low mileages on the clock. Never buy without seeing the service history and registration document. Take copies, phone the previous owner(s) and servicing dealers to confirm the mileage - a service history can easily be forged.

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