Are you thinking of buying a luxury car? Have you weighed your options? We've taken a look at the pros and cons of luxury cars to help you make a decision.
Everything You Need To Know Before Buying A Luxury Vehicle
There’s something about the smell of leather, about the roar of a powerful engine, and the sleek curves and angles of even the most basic of luxury cars. They’re exotic. They’re romantic. They’re immensely comfortable. However, if you’ve never owned one before, you might be surprised at the pros and cons of luxury cars. Let’s take a look at some things to consider before going out and making a big purchase.
Pros and Cons of Luxury Cars
Under the hood of the average luxury car, you’ll find at least a high-performance V6, if not a higher-end V8 (or an even larger engine). There are very few with 4-cylinders, and those that do have these smaller engines have turbocharged, high-octane versions that deliver the power and punch owners have come to expect in this segment. BMW’s M line alone averages between 400 and 600 horsepower. That means you get lots of get up and go for your money, answering a big part of wondering are luxury cars worth it?
One of the most interesting positives that come from owning a luxury car vs economy car is the enhanced safety you and your passengers will enjoy. Most luxury cars today have a full complement of air bags, but they also have additional technology. For instance, Forbes notes that 71% of luxury vehicles today come with ABS, side-front airbags, traction control and more. You’ll also find that most luxury cars are ranked very highly in terms of crash testing by the Insurance Institute for Highway Safety and the NHTSA.
Increased Fuel Costs
While you might be safer behind the wheel of a luxury car, you’re going to pay more for the experience. It’s not just about fuel economy, although many luxury cars aren’t exactly gas-sippers. Rather, a significant percentage of vehicles in this segment require premium gas, rather than regular unleaded. That means you’ll be paying more at the pump for every fill up. Of course, if you’ve got the money for a luxury car, that might not be a burden.
One thing that often surprises first-time luxury car buyers is the cost to insure the vehicle. You’ll be paying a decent amount more on your annual insurance bill. That makes sense, though, since the vehicle itself costs more. Insurance companies have to up their costs to compensate for the potential of having to pay out. You’ll pay even more if you end up with a luxury sports car. On average, luxury car owners pay about $500 more per year than their non-luxury car owning counterparts do, but this will certainly vary depending on your driving record, your state, the insurance company in question, and the actual car itself.
Depreciation Takes a Bigger Bite
All vehicles depreciate. In fact, luxury cars depreciate less than those that are a bit more budget friendly. However, because you’re shelling out so much more for a luxury vehicle, that depreciation takes a larger bite out of the value.
For instance, if you pay $80,000 for a car, and it depreciates by 50%, then you’re losing $40,000. Compare that to a car that cost $20,000 and lost 75% of its value, losing you $15,000.
On the flip side, buying used luxury cars has a lot of benefits.
While you will definitely lose a lot of money with depreciation, you’ll find that luxury cars do manage to have a higher resale value. According to Forbes, more than half of the top 15 best resale value cars recently were from the luxury segment. Of course, that doesn’t mean you’ll be able to recoup all of your costs, and depreciation will affect what you’re able to get for it. Kelley Blue Book can give you a great deal of information about the resale value of specific luxury cars and the various factors that affect value.
Repairs Can Be a Headache
All luxury vehicles need regular maintenance and will eventually need some sort of repair work done. Most things, like oil changes, should be no problem although you might have to provide your own oil filter if you’re not having it done at the dealership. Other repairs can be very costly, and it can be hard to track down a shop capable of doing the work, depending on the make and model you own. You’ll also find that you’re paying more with the luxury dealer. An independent shop may be able to save you some money, but make sure there’s no way any such work would void your warranty.
Kids Could Kill Your Wallet
If you have children, then a luxury car may not be the right choice for you. Kids are kids, and spills, messes and accidents happen. There’s no getting around it, unless you ban your children from the vehicle completely, which is something that most parents are unwilling to do. A simple spill of milk, juice or soda on your ultra-high-end leather seats could spell disaster. You could ban all eating or drinking in the vehicle, but then what would you do on longer trips where it’s a necessity?
You Pay More for the Little Things
Most drivers don’t really count the cost of little things. Questions that are part of should I buy a luxury car? Like a spare key, a new battery, etc. They’re part and parcel of ownership, and generally don’t cost that much, right? Wrong – with a luxury car, you might be paying hundreds of dollars extra. Need a spare key for that Mercedes? Chances are good you’re looking at a price somewhere around $400. Need a new battery? You could get by with $100 or so with other cars, but your luxury vehicle probably has a dry-cell battery, which could run a minimum of $350.
Like any other type of car, there are both good and bad things about owning a luxury car. Are luxury cars worth it? You may find that the pros outweigh the cons, or that the cons overpower the items that make owning such a car worthwhile. Everyone’s situation is different. The most important thing is to realize that there’s no such thing as a perfect ownership period, and you will definitely encounter some of the issues at some point.