Is buying a luxury car worth the expense? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by providing you with financial calculators and interactive tools, publishing original and objective content, by enabling you to conduct research and compare information for free to help you make financial decisions with confidence. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The offers that appear on this site are from companies who pay us. This compensation may impact how and when products are featured on this website, for example, for example, the sequence in which they be listed within the categories of listing and other categories, unless prohibited by law for our mortgage, home equity and other products for home loans. But this compensation does affect the information we provide, or the reviews that appear on this website. We do not cover the universe of companies or financial offerings that could be open to you. SHARE Peter Cade/Getty Images
4 min read Published March 02, 2023.
Written by Dan Miller Written by Points and Miles Expert Contributor Dan Miller is a former contributing writer for Bankrate. Dan was a writer for Bankrate who covered loans and home equity as well as managing debts in his work. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping readers gain the confidence to manage their finances by providing precise, well-studied and well-researched data that breaks down otherwise complex subjects into digestible pieces. The Bankrate promise
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You have money questions. Bankrate has the answers. Our experts have been helping you manage your money for over four years. We strive to continuously provide our readers with the professional guidance and the tools necessary to be successful throughout their financial journey. Bankrate adheres to strict standards , so you can trust that our information is trustworthy and precise. Our award-winning editors and journalists produce honest and reliable content that will help you make the best financial choices. The content we create by our editorial staff is objective, factual, and not influenced through our sponsors. We’re transparent regarding how we’re in a position to provide quality content, competitive rates and useful tools to our customers by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and services, or through you clicking certain links posted on our website. Therefore, this compensation may influence the manner, place and in what order products are listed, except where prohibited by law. We also offer loan products, such as mortgages and home equity, and other products for home loans. Other factors, such as our own website rules and whether or not a product is available within your area or at your personal credit score can also impact how and where products appear on this site. Although we try to provide the most diverse selection of products, Bankrate does not include the details of every credit or financial product or service. If you’re looking to buy a new car or you might be considering if buying a luxury car is worth the investment. Since there isn’t necessarily a minimum cost or number of features that define a car a “luxury car,” you will have many options =. How do you determine if a luxury car is right for you ? There are several things you need to consider when shopping for to suit your particular needs. Are the features better? If a car’s performance is crucial to your needs, then you will want to pay close attention to the performance ratings of the vehicle. Using them, you can evaluate factors such as speed, handling, and braking power. Although this is not always the case some luxury manufacturers boast superior performance. Bankrate tip
Look up ratings from third-party sources such as J.D. Power as well as Kelley Blue Book to see if the handling is worth the cost. Cars that aren’t as expensive can be a pleasure to drive.
Do safety ratings perform better than non-luxury brands? Another aspect to take into account when evaluating a luxury car is the manufacturer’s safety ratings. These cars are known as having better quality components and high-quality manufacturing standards. This can result in better safety ratings for side or front impact, roof strength , and features for avoiding crashes like headlight brightness and crash prevention systems, as well as other factors that affect rating. The Insurance Institute for Highway Safety (IIHS) is an independent, third-party organisation that aims to reduce accidents, deaths and property damage from motor vehicle crashes. The IIHS rates the majority of new vehicles in a variety of safety-related categories every year. When comparing luxury car models and models, the vehicle’s IIHS safety rating is another standard to evaluate against other brands. Bankrate tip
Before signing off on an expensive vehicle, think for the safest options for less than $25,000.
Are there features that are available in a car that is not luxurious? From sunroofs to leather seats Comparing different brands or models is comparing a plethora of features. What you value most may not be in line with the standard options for a particular model of vehicle. Consider putting in writing specific features that matter the most to you — this will assist you when you search for your . Certain features of higher quality that people are looking for when they are considering a luxurious car include an entertainment system of the highest quality and heated or massaged seats, or smartphone integration. Deciding on what is important to you can help keep your emotions in check as you go new car shopping. Tips for Bankrate
Remember that vehicle advancements are constantly evolving. And more than that modern luxury car features tend to become the standard features of tomorrow.
Does the investment justify the price? While there isn’t a set price that defines what is considered a luxury vehicle, a luxury vehicle can be sold at a higher price compared to other types of automobiles. They’re typically assets that depreciate which means that their value declines with time. Also, consider that it’s common for the upkeep of expensive cars to be more costly than that of non-luxury cars. Repairs, parts, labor and the like are generally more expensive. Be sure to budget for higher ongoing costs and the increased purchase price. Bankrate tip
Make use of this opportunity to understand the amount your luxury vehicle will cost monthly.
How a fully loaded standard car is different from a luxurious brand ? A luxury car doesn’t have a specific definition. What people consider as a luxurious car is contingent on the model of the car. Companies like Lexus, BMW, Mercedes or Jaguar are considered “luxury” in a lot of people’s minds. While it is true that the cars of these manufacturers come with high-end features, you’re also paying a little for the prestige of the brand name. Instead of buying a brand with a luxurious name you can consider buying a fully loaded standard vehicle. Even a basic car such as a Honda Civic has many different trim options. While the base model comes with standard features, pricier trim packages include many more expensive options that are exclusive to luxury cars. Think about what types of features you’re interested in and then make a decision based on that. Luxury cars appreciate at a higher rate. All vehicles depreciate the moment that you exit the dealership lot. However, luxury vehicles appreciate more quickly than their competitors in the middle. Depreciation that is faster means you’re likely to not get back the money you invested on the car when it’s time to sell it. Be aware of the factors that can lead to a more rapid depreciation. More on the market. Luxury drivers tend to buy new cars every few years. That means the number of available cars sometimes outweighs the number of buyers. The models become outdated. The people who shell out extra cash for a luxury car tend to want all the bells and whistles. Thus, an older model may not get the premium price tag that you originally bought it for as models age much more quickly. Maintenance for your vehicle. Trips for a body repair can to be more expensive for the latest or foreign models, negatively impacting the value of the vehicle’s resale. If you want luxury without massive depreciation, you should consider shopping for vehicles that are rather than brand new. That way, you can move into the luxury market without being stuck with the loss of money. Financing a luxury car Depending on the kind of luxury car you buy You may be able to finance it the same way as you finance any other new car. But if your new luxury vehicle is greater than what conventional auto lenders can loan, you may have to think outside the box. Contact the dealer. Car dealers with luxury cars may offer you can take advantage of. Think about placing more money down. If you are having trouble finding an auto loan for the full amount of your purchase, you may have to . Arrange your own financing. You might be able to finance your luxurious car with a personal or home equity loan. Explore a luxury vehicle lease. If you are itching for a luxury car but aren’t sure you want to buy, you might a new one. The bottom line A fully loaded standard car and the luxury vehicle are two options that are viable, and no one solution is the best for every person. Look at the different choices that are available in the vehicles you’re interested in , and then ask yourself if you’re only paying extra for the brand name that’s on the car. That can help you decide the best option for you.
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Authored by Points and Miles Expert Contributor Dan Miller is a former contributor to Bankrate. Dan was a writer for Bankrate who covered loans, home equity and debt management in his writing. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain confidence to manage their finances through providing clear, well-researched information that break down complex topics into manageable bites.
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