Are Luxury Cars Worth The Price?

Your investments and hard work have finally earned you enough money to splurge on something nice.

Naturally, your eyes turn toward a shiny new car, a luxurious cabin, and a status symbol that hints at your success. However, you may be wondering if your hard earned cash is well spent on a luxury car. With higher risks of depreciation, heftier running costs, and increased insurance rates, owning or leasing a luxury car presents a unique value proposition when compared to the average vehicle. Let’s dive into the reality of owning a luxury car and determining if it’s worth the price. 

The Allure of Luxury Cars

High end vehicles draw in masses of consumers each year. In 2023, there were 87,300 luxury vehicle purchases which marked the 4th consecutive year of growth in sales for the United States. Why do buyers choose luxury vehicles?

Unmatched Comfort and Refinement

Luxury automakers spare no expense when it comes to interior materials. Leather upholstery, wood accents, and carbon fiber are commonplace in luxury vehicles. Advanced creature comforts like massaging seats, multizone climate control, personalized interiors and sound deadening offer drivers a relaxed driving experience that can only be experienced in a luxury car. Today’s cars have created a cabin that is nearly completely isolated from the outside world with a smooth and whisper quiet ride. 

Cutting-Edge Technology and Performance

Luxury car’s refinement doesn’t stop inside the interior. They are often equipped with more powerful engines or electric motors which make acceleration a breeze. Advanced driver-assistance systems like automatic emergency braking, adaptive cruise control, and lane departure warnings draw in safety-oriented buyers. Automakers drop their latest technology innovations in their luxury offerings with features such as night vision, heads-up displays, and AI being more common in today’s vehicles. 

Status Symbol and Exclusivity

For many owners, a luxury car represents their own prestige and success. Like a fancy Rolex, these vehicles allow owners to stand out from the crowd with a unique and desirable symbol of their own achievements. Though the brand symbol on a car may not mean much to the average buyer, luxury car shoppers look for manufacturers known for craftsmanship and a high price tag. Professionals and business-minded buyers see luxury cars as a necessary expense. Showing up to a meeting in a fancy car shows clients that you mean business. 

The Not-So-Glamorous Side of Luxury

Hefty Price Tag

The average price for a luxury car reached $75,000 in 2023. That’s a premium of nearly $20,000 compared to the average price of a new car from the same year. Due to the higher cost of luxury vehicles and the subsequent costs to repair, they often demand higher insurance premiums as well.

Steep Depreciation

Luxury cars tend to lose value at a much faster rate than mainstream cars. It’s not uncommon for luxury cars to lose about 50% of their value after the first 5 years. This steep depreciation curve makes leasing a more attractive option for many potential buyers.. 

Higher Maintenance Costs

Parts and service for luxury cars can be significantly more expensive than standard vehicles. Their more complex designs and intricate technology requires pricier parts and well trained technicians to tackle repairs and maintenance. Car accidents with luxury cars may run the risk of going over insurance premiums to foot the repair bill. In these cases, hiring legal expertise to fully recover from an accident may be necessary according to the Denver car accident attorney at Dormer Harpring. 

Making the Right Choice

Consider Your Needs and Budget

Do the extra bells and whistles justify the additional costs for your lifestyle? Can you comfortably afford the ongoing expenses? Carefully consider not only the monthly car payment, but other expenses like depreciation, insurance costs, repair and maintenance costs, etc,. 

New vs. Used Luxury Cars

Sometimes the right choice is going after a used car. This allows the first owner to eat the majority of the depreciation while you get in a luxury car for a cheaper price. Sure, it may be a step behind the latest generation of cars, but a used car may still check all the boxes you’re looking for. Just be sure to research the vehicle’s reliability so your savings don’t go straight into repairs. 

Luxury on Your Terms

The latest luxury cars offer supreme comfort, performance, and safety compared to their normal counterparts. Those looking to splurge on a status symbol of a vehicle should keep in mind the heftier price tag, steep depreciation, and higher maintenance costs. It may be worth exploring alternative options like shopping used or leasing. Ultimately, the right decision comes down to individual priorities and budget.

Photo by HamZa NOUASRIA on Unsplash