If you’ve always dreamed of buying a luxury car, but you were never sure about the timing, or even if you should go through with it, there’s a lot to consider.
Luxury cars are often fast and exciting, but they’re also expensive. When you drive the car off the dealership lot, the costs don’t end. You have to maintain a luxury car, and you may need to work with specialized mechanics.
Whether or not it’s all worth it is a personal decision, but the following are considerations and things to know before you decide.
Types of Luxury Cars
The term luxury car is broad and can mean different things to different people.
In general, a luxury vehicle has more technology and greater comfort than other cars. Luxury cars also come from brands the public associates with an elevated status.
According to eurocharged.com, the lowest-priced entry point for buyers who are interested in a luxury vehicle is usually a sedan. A sedan is like a bridge between more mainstream vehicles and what is defined as a true luxury car.
Some sedan luxury vehicles will have a spacious front seat, but may have a cramped back seat. The larger sedans that are more geared toward the luxury market include the Audi A6 and A8, the BMW 5 Series and 7 Series, and options like the Porsche Taycan and the Tesla Model S.
The least expensive entry point car that could still be considered luxury would likely cost in the mid-30,000s and only go up from there.
Luxury SUVs include options like the Land Rover Range Rover Evoque, the Mercedes-Benz GLA, and the Tesla Model Y.
Larger luxury SUVs include the Acura MDX, the Buick Enclave, and the Lincoln Nautilus.
A full-size luxury SUV can range in price from the mid-30,000s to $100,000.
Finally, sports luxury cars are often the preferred option when people are ready to buy the car they’ve always dreamed of. Audi, Lexus, Porsche, Mercedes, and many others compete in the luxury sports car market.
What to Consider When Buying a Luxury Vehicle
If you weigh whether or not a luxury car is worth the price for you, there are some considerations, including:
- Seating: Larger sedans and SUVs with three rows of seating will give you the ability to use the vehicle as a commuter car or a family vehicle. On the other hand, smaller sedans and coupes require you to trade sporty handling and driving for a very small back seat.
- Fuel economy and engine: The entry-level engine for a luxury car is often a four-cylinder design, often with turbochargers. Luxury cars usually have an automatic transmission with between six and nine speeds.
- Safety: With any new car, you will get pretty impressive safety features and driver assistance technologies compared to what you might have just a few years ago. When you pay the premium for a luxury car, you will get features that allow you to operate in the safest way possible.
What to Keep In Mind Before Making a Purchase
If you’re weighing whether or not to get a luxury car, remember the following:
- You don’t have to buy a new luxury car, but if you are going to, you should research the residual value rating of the vehicle. Many luxury cars are leased, so the residual value at the end of the lease tells the sales company what the vehicle is thought to be worth at that point. The residual value is a good indicator of the quality of the vehicle and the value retention characteristics of a particular model. Within that calculation is a consideration for reliability and durability.
- Is there a warranty? Some manufacturers will offer extended coverage for things like the powertrain, and they might last for long periods of time, or it could be based on mileage. You do have to be mindful that extended warranties aren’t always a good thing. Some people see them as a red flag that the manufacturer has had issues in the past, but at least you’re covered regardless.
- If you’re buying a new luxury car, you might be able to negotiate and get a free maintenance package from the manufacturer.
- How much is fuel economy important to you? Also, what type of fuel will the vehicle need? A luxury car with a turbocharged or higher-performing engine may need premium fuel. Gas is extremely expensive right now, so it could give you pause. Not all luxury cars require premium gas—it really does depend, so you have to do your research.
- You’ll have to decide whether you’ll get a new car or a used one. You get the most advanced technology and safety gear, engineering improvements, and a factory warranty with a new model. You know what you’re getting with a new car, and you can customize the vehicle and make it exactly what you want. Of course, the downside is the rapid depreciation. Your new car might lose a third or more of its value in the first two or three years of you driving it. If you pay a low down payment and finance the vehicle, you can pretty easily see how you might end up upside-down on your loan.
- Used cars are a good alternative, and you’ll still have plenty of choices.
- Car tires wear out a little each time you’re using them, and then they will be replaced. You should price out the tires needed for a luxury vehicle before committing.
Finally, how much will insurance cost? There are a lot of factors that play a role in the cost of car insurance, and your vehicle type is one of those. Dependent on several key variables, the cost to insure a luxury vehicle may be a little more, or it can be a lot more than going with a mainstream vehicle.
You should especially pay attention to the company’s deductibles on your collision and comprehensive coverage.
Once you’ve thought about everything above, maybe you’ll decide you’re ready for a luxury car purchase. On the other hand, you could also decide it’s not the right choice for you, given your circumstances and preferences.