A QUARTER of a million dollars. That’s roughly what Audi’s A8 flagship costs after on-road costs are taken into account.

Given that Audi says most A8 customers are private buyers who drive the car themselves, one would assume that someone with that much money to spend on a car is not going to worry a great deal about the size of their fuel bill. So what is the point in offering a diesel?

In today’s world, green is the new black, bragging rights continue to count and diesel technology is progressing at an astonishing rate – to the point where Audi’s range-topping diesel outperforms its petrol equivalent.

Few cars on the market can offer a juxtaposition of high performance and low emissions like Audi’s A8, which has just received an update to the impressive 4.2-litre twin-turbo diesel V8 that graced the previous model and now comes with the option of an all-new, entry-level 3.0-litre diesel V6.

Both engines feed power to the Quattro all-wheel-drive system through the same creamy eight-speed ZF automatic transmission as the petrol model.

The A8 really is one of a kind in the Australian market. For a start, it is the only luxury sedan to be offered with a diesel V8 – Audi's German rivals BMW and Mercedes make do with six-pot powerplants for their oil-burning 7-Series and S-class flagships.

Only the petrol-electric Lexus LS600hL has standard all-wheel drive and Jaguar’s V6 diesel XJ is the sole aluminium-bodied alternative. With the exception of a couple of crazy V12 AMG Benzes, no competitor offers anything like 800Nm of torque.

So far, none have the option of futuristic and cool full-LED headlights and no oil-burning limo can come close to a 5.5-second 0-100km/h time.

With boasting rights catered for and your car-park compatriots a quivering mess of automotive inferiority, the next important question is how does the new diesel V8 drive?

The quick answer is, just like the petrol A8 but with seemingly endless reserves of mid-range punch, even more effortless cruising ability and a range that will see you emptying your bladder far more frequently than the fuel tank on a long haul.

If anything, the V8 soundtrack is more noticeable from the diesel A8’s cabin, adding to the performance feel as you hurtle towards the horizon on a tsunami of torque.

The acceleration is addictive and with the superb gearbox making the most of the engine’s considerable output, overtaking manoeuvres are executed with aplomb – meaning there is almost always space to get past slow-moving caravans, farm machinery and crumbling Ford Festivas.

Even in a bigger-is-better world, the 3.0-litre diesel V6 manages some impressive bragging rights of its own. Other than its diesel big brother, it beats all competitors with its 0-100km/h time, fuel consumption and CO2 emissions, making it a persuasive proposition for planet-saving plutocrats.

At $188,000, it also undercuts its rivals on price, leaving plenty of change with which to indulge in the options list or invest in carbon credits.

To drive, the V6 is all the engine you’ll ever need and its idle-stop system never feels intrusive. Deeply impressive in its performance and power delivery with plenty of forward thrust available at any speed, it is also quiet at idle and so smooth that it is almost impossible to tell that it burns diesel. Even standing outside the car while the engine is revved in neutral, only the exhaust odour gives it away.

The V8 diesel is a brute in comparison and cannot match this level of refinement, with a noisier, clattery idle.

We were unable to sample the night-time effectiveness of the optional ($2700) full-LED headlights fitted to our V8 test car but they look classy and futuristic enough to be a conversation starter – a bonus considering the A8’s slightly anonymous styling.

It is worth taking some time to familiarise yourself with the cabin before moving off for the first time. Myriad buttons, knobs and switches are clustered on the centre console in addition to the central MMI controller. A lot of the functions are replicated on the screen between the rev-counter and speedometer, accessed using a jog wheel and buttons on the steering wheel.

If you already know how to use consumer electronics such as iPods and a Nokia phones, it doesn’t take long to get used to how everything works.

Audi’s Drive Select system is present and correct, offering a choice of comfort and dynamic settings that alter the suspension’s firmness, the gearbox behaviour and sensitivity of controls.

An automatic mode adjusts these settings on the fly depending on how the car senses you are driving. A fourth option enables you to configure the car to your own tastes.

Once underway, cog swaps from the eight-speed ZF auto are seamless and unnoticeable but for the rev-counter readout and a dashboard icon displaying the selected ratio. When using the paddle-shifters, gearchanges are equally smooth and almost instantaneous.

You are unaware of the car’s physical size and the petrol V8’s high level of grip and overall cornering competence is carried over as expected.

That said, so is the petrol car’s body roll and those mid-corner ripples that frequently occur on Australian country roads really upset the body control – regardless of the chosen Drive Select option – causing the car to feel like it is floating. In this scenario, the vague, lifeless steering offers little reassurance.

The heavier 4.2 feels far more planted than the 3.0 but you can feel the V8’s extra heft in the nose when rapidly changing direction and despite the extra power and grunt, it requires that you get on the power earlier coming out of sharp bends than you would expect in order to overcome what seems to be a combination of gearbox hesitation and turbo lag.

This is improved slightly if you are using the paddle-shifters but with eight ratios and eight hundred Newton metres, you can be forgiven for expecting the car to pull out of any corner on maximum attack without having to adapt your driving style.

Maybe we are asking too much – if you want to flog an expensive car along a twisty mountain road, there are many more suitable options, most of which have half the number of doors. That said, at this end of the market it is doubtless some comfort to know that in an emergency situation, the A8 is capable of out-manoeuvring – and in V8 diesel guise out-accelerating – most other cars on the road.

Despite Audi claiming its A8 to be the sportiest limo on the market, cars in this segment are primarily designed for carrying people in comfort.

In this area, intrusive road noise on some surfaces is disappointing and even in comfort mode, the ride is not world-insulating. Rather than effortlessly soaking up bumps and potholes, the suspension allows the body to move rather a lot.

Additionally, the super-adjustable front seats can take a while to get into the perfect position. Why not just fit less-adjustable but intrinsically comfier seats? If you buy an A8, don’t forget to set the memory once you have found your ideal configuration of seat, steering wheel and door mirror position.

With the driver’s seat positioned for a six-footer, another above-average height person has adequate leg and knee room to sit directly behind. It is by no means a cavernous space though – for that you’ll have to tick the long-wheelbase box on the order form.

Audi’s reputation for interior ambience is safe with the A8. However, the steering wheel paddles, while having a satisfying click action, are plasticy and not made of a material that befits such an expensive car. The flimsiness of the rear centre armrest cover disappoints and there was a rather loud creak emanating from our V8 test car’s glovebox lid.

A feature that will appeal to chauffeurs is that with Drive Select set to comfort mode, the first third of accelerator and brake pedal travel has a subtle action, helping you to drive smoothly without having to concentrate too hard on feathering the controls.

The optional $5495 adaptive cruise control as fitted to our 3.0-litre test car was superb. Setting the required speed using is a doddle using a column stalk and small red lights around the perimeter of the speedometer serve to remind you of the speed that will be resumed should you need to slow down or stop.

Left to its own devices it uses radar to maintain your preferred distance from the vehicle in front, even coming to a halt and moving off gently when required – a feature for which to be thankful if regularly stuck in traffic jams.

Although the A8 has to make some big compromises to offer both comfort and sportiness, it leaves the driver relaxed and refreshed after a long drive.

While we didn’t achieve Audi’s quoted fuel consumption figures, it is obvious that the V6 has to work harder than its big brother, given that 8.0l/100km is 1.4 litres worse than the official figure of 6.6. Our test V8 got closer to its stated combined figure, consuming an extra litre over Audi’s claimed 7.6l/100km.

The A8 is without doubt an impressive achievement and a great showcase for its glorious 3.0-litre TDI engine. Were it our money, we’d go for the base model and tick a lot of options.

However, the definition of luxury is to have more than you could possibly need and because of this, the mighty 4.2 TDI is the pick of the bunch.

Not only does the big diesel offer the highest real-world performance currently available in an A8 and an unrivalled combination of technologies, the guilt-free feel-good factor of driving a fast V8 luxury sedan with fuel and CO2 figures to rival a Ford Focus has plenty of appeal.