Luxury cars look and perform incredibly, but there’s a cost to those benefits; not many people can afford a luxury vehicle, and those who can often make a more frugal choice to keep their finances in good shape. Today, auto loans are relatively easy to get, and the number of luxury vehicles available is increasing—leading more consumers than ever to consider purchasing a luxury car for themselves. But are luxury cars a good investment, or are they simply a waste of money?
The Benefits of Owning a Luxury Car
Luxury cars tend to be expensive for a reason: they offer more value than entry-level brands, and in several areas. Indeed, there are many benefits to owning and driving a luxury vehicle, including:
- Comfort. Luxury cars are almost always more comfortable than their cheaper counterparts. Engineers and designers work to create vehicular models that result in a smoother, more enjoyable ride for both drivers and passengers; better shock absorption and similar systems make the vehicle quieter and less bumpy when traveling, while better seats and interior features make it more comfortable to drive.
- Safety. As a general rule, luxury cars tend to be safer than their cheaper counterparts, though this isn’t always the case. There are some entry-level brands that offer amazing safety features, and some luxury brands that fail to meet high safety standards. That said, if you do your research before you buy, you should be able to find a luxury car with better safety standards than almost any other car on the market.
- Reliability. Luxury cars tend to be built to last. If they started deteriorating after only a year on the road, people wouldn’t buy them for such an obscenely high amount. Accordingly, if you buy a new luxury car and take care of it well, you can generally expect it to last for many years. Again, this isn’t exclusively true of luxury brands; some entry-level brands offer a similar level of dependability.
- Customer support. Luxury vehicle brands are committed to their customers, hoping for repeat sales and practically guaranteeing customer satisfaction. If you’re dissatisfied with a luxury vehicle for any reason, you can count on someone helping to make things right for you. With that much money on the line, sales reps and customer service specialists want to make sure everything is handled professionally.
- Used options. New luxury vehicles are oftentimes too expensive for the average person to afford, but because many high-end customers purchase a new vehicle every year, there’s always an abundance of used options for other consumers. Used luxury vehicles offer impressive discounts, allowing more budget-conscious consumers to get access to a similar level of comfort and safety.
The Drawbacks of Luxury Cars
There are, however, some downsides to buying or owning a luxury vehicle:
- Depreciation. First and foremost, all vehicle depreciate quickly, but luxury cars depreciate even faster than usual. After driving a new luxury vehicle off the lot for the first time, you can expect the value to significantly drop—and it’s going to continue dropping with each passing year. If you’re in the market for a used luxury car, this is a good thing—it means you can usually find a reasonable model for far less than new price—but if you’re thinking about a new luxury car as an investment, you’ll need to be prepared for some losses.
- Parts and repairs. Most luxury brands are designed to last, which means basic maintenance is all you’ll need to keep the vehicle running for years. However, if and when something does go wrong (like if you’re involved in a collision), replacement parts and manufacturer repairs can get expensive. Your vehicle may need specialty parts not carried by local repair shops, and may have more complex systems that require greater precision.
- Cost to value ratio. Luxury vehicles often do offer worthwhile advantages over other types of vehicles. The question is, are those extra perks worth the extra money? For example, if a luxury car costs three times as much, is it truly three times as comfortable or three times safer? This is difficult to quantify, so the answer is often ambiguous. It’s also different for every make and model, so you’ll need to do your research before coming to a conclusion.
Making the Decision
The pros and cons of luxury cars as an investment are too complex and dependent on personal variables to make a universal decision as to whether they’re truly worth the money. For some people, a luxury car provides both comfort and peace of mind well in excess of the money they spend on it. For others, it’s a completely unnecessary purchase, and a simpler, more practical vehicle will work just fine. Think carefully about your own values and needs before making your decision.