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Are Luxury Cars Worth The Price?

Owning a luxury car for most people is a sign that you are truly successful. If you own one you can’t imagine driving anything else as it offers refinement and performance unmatched by the more common brands.

For those who don’t have one, we dream about it every time we see one on the street, on television, read about them and picture ourselves driving them.

The price of one of these cars is always in our minds and often we think about what we can do to make it possible to afford one.

But while we are doing this we rarely consider the cost of owning one of these cars and if the badge, the perceived value and everything that comes with a luxury car is really worth the cost.

So the question is: are luxury cars really worth the additional cost?

The Research

CJ Pony Parts completed research, comparing luxury brands to mass-market brands in six different areas: safety, resale value, initial quality, customer service satisfaction, cost of ownership, and cost to insure to see if luxury cars are worth the price.

The Results

Looking at the results there were certain areas where the result was the expected one, but there were other areas that were surprising.

Luxury manufacturers perform very well in initial quality and customer service, but fail to hold their value.  The Chevrolet Corvette is the exception, making it into the top ten in Kelley Blue Book’s 2014 ranking for resale value.

2014 Chevrolet Corvette Stingray Convertible

In the area of maintenance costs, they’re slightly less than at independent service stations, but comes in at almost double when visiting the dealership.

Not surprising is the cost of ownership of a luxury car is greater as is the cost to ensure one.

My Thoughts

The question of whether something is worth the cost is something that I have spent a great deal of time thinking about, specifically when it comes to cars. It’s not black and white to me. It seems that for a lot of people the perceived value of a car and prestige associated with driving one trumps everything else. Being able to pull up to a restaurant in an expensive car and have everybody look is enough of a reason for some.

I’ve often wondered if there were two identical cars, other than the badge on the hood and the price tag if most people would buy the more expensive one over the mass-market one. I think the answer is yes.

I think that’s why if you go to most cities you can find a person driving a 10-year-old Mercedes, BMW, Lexus, Jaguar, Cadillac or any other luxury car because of the perception and what they think it says about them. For the same price, in many cases a newer car could be purchased, that performs better, is more reliable and but isn’t a luxury brand.

That being said there are many cars that fall into the category of a luxury car that I would love to have parked in my garage. But it really comes down how they can perform. I love Porsches, I always have, but it wasn’t the name or the prestige of owning one that attracted me, but seeing what they could do on a racetrack in the hands of a capable driver.

Looking at the difference in the cost of two vehicles, the question I find myself thinking about is, is the car in question really worth the higher cost or am I just paying for a name, an idea, or a badge?

Hyundai Sonata SE 2.0T front

So, are luxury cars more expensive because they are a superior car and is that higher cost worth it? I don’t know. When it’s all said and done I think it really comes down to personal preference and what how each person looks at it. For some the cost of a luxury car compared to a mass-market car is justified by the experience and everything that comes with owning a luxury car and for others it doesn’t matter at all.

For me there am very few times that I would buy the luxury car because of the higher cost of entry and potential high operating costs. If a luxury car is what you desire there are definitely better options that tick all of the boxes and if you’re a savvy consumer they can be found, but don’t be too quick to ignore that mass-market car.

Check out the infographic below for the findings on the research and let us know what you think about the findings as well as what your opinions are regarding luxury cars’ inflated pricing.

Luxury Cars Infographic

Infographic thanks to CJ Pony Parts

  1. Thanks so much for sharing our infographic as well as the really thoughtful write-up! I definitely agree – the perceived value of a vehicle just isn’t something you can quantify, like you can the value in terms of safety, resale value, etc. I can’t say the data would keep me from buying certain brands if I had the opportunity!

  2. 1. Luxury cars is my weak side, I get
    crazy because of these cute cars and their prices. If you love cars you will do
    everything for having BMW or Mercedes-Benz last models. I prefer German cars
    though my first car was a French Peugeot.

  3. “safety, resale value, initial quality, customer service satisfaction, cost of ownership, and cost to insure”

    What a ridiculous set of criteria. These are things that the poors look at when buying a car like a Camry. Luxury vehicles go far beyond those metrics. What about exclusivity, scarcity and brand esteem? That’s what wealthy people look at when buying a premium vehicle.

    1. Good point! Although calling everyone else “the poors” kind of detracts from your credibility.

      1. Was just being a little cheeky. To be able to properly analyze and report on a particular topic, it’s important to understand it. Marketing and selling luxury products is entirely different than selling mass products.

        1. Nobody can argue with that, and it’s a very good point. There’s a lot more that goes into the desirability of a vehicle (or anything for that matter) than numbers on a piece of paper.

          It seems though that this report was focusing on the numbers – which is a natural thing for “the poors” ( 😉 ) to do.

          There’s also a sort of X-factor in a vehicle, and I hate to use that term but it’s true, that makes a car more desirable than another one based on a factor that can’t really be qualified or quantified.

          1. Exactly. Luxury brands are constantly thinking of ways to create that X-factor to seduce their audience. For real luxury brands, scarcity is one of the most common ways. It’s like “Erhmergherd… there are only 150 firecracker orange Audi R8s with laserbeam butt warmers and carbon fiber nut-rests coming to the US??? And ONLY $300k? Where do I sign?” But the deal is, there has to be some legitimacy behind it. That’s why Buick and Toyota are totally unconvincing with their “Limited Edition” models. Price can also create scarcity, but only works if the virtues and the perceived value or esteem of the product support it.

            Besides price, to create exclusivity automakers also layer-on “personalized” trinkets that customers tend to over value. “A $300 key that matches the exterior color of my car!? Well why not?” Nevermind that a rattle can can achieve the same result. But that’s beside the point. Porsche offers it and people eat it up.

            The “Esteem” component is much trickier. It has to do with how people perceive brands and how they want other people to perceive them in connection with a brand. A lot goes into this and it’s the secret sauce of luxury marketing. But it either takes many years to cultivate, or a ton of money and unconventional marketing to build quickly from the ground up.

            Apple and Tesla are masters of all of this. Audi and Cadillac to a lesser extent. Lexus used to be able to seduce their customers, but they’ve lost their mojo. When a product becomes a spec sheet, a commodity like the criteria of the topic suggest, it’s no longer a luxury brand.

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