Is buying a luxury car worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering you interactive tools and financial calculators, publishing original and objective content. We also allow you to conduct your own research and analyze data for free - so that you can make financial decisions with confidence. Bankrate has partnerships with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this website are provided by companies who pay us. This compensation can affect the way and where products appear on this website, for example for instance, the order in which they appear within the listing categories, except where prohibited by law for our mortgage, home equity and other products for home loans. This compensation, however, does affect the content we publish or the reviews that appear on this website. We do not cover the vast array of companies or financial deals that might 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 wrote about loans as well as home equity and the management of debt in his work. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to manage their finances by providing concise, well-studied information that breaks down otherwise complex topics into manageable bites. The Bankrate promises
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If you have questions about money. Bankrate has answers. Our experts have been helping you master your finances for over four decades. We are constantly striving to provide consumers with the expert guidance and tools required to succeed throughout life's financial journey. Bankrate follows a strict standard of conduct, so you can rest assured that our content is honest and reliable. Our award-winning editors, reporters and editors create honest and accurate information to assist you in making the right financial decisions. The content created by our editorial staff is objective, factual and uninfluenced from our advertising. We're transparent regarding how we're able to bring quality content, competitive rates, and helpful tools to you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the placement of sponsored products and, services, or through you clicking certain links posted on our website. This compensation could influence the manner, place and when products are displayed within the categories of listing in the event that they are not permitted by law. This is the case for our mortgage, home equity, and other products for home loans. Other factors, like our own proprietary website rules and whether the product is available in the area you reside in or is within your self-selected credit score range can also impact the manner in which products are featured on this website. Although we try to provide an array of offers, Bankrate does not include information about every financial or credit product or service. If you're in the market for a new or , you may be thinking about whether purchasing a luxurious car is worth the cost. Since there isn't necessarily a minimum price or set of features that make a car"luxury car, "luxury car," you will have many options =. How to determine whether a luxury vehicle is right for you ? There are a couple of aspects you'll need to consider when shopping for the right car for your needs. Does the performance improve? If the performance of a vehicle is especially important to you, then you will want to pay close attention to the performance ratings of the vehicle. Using them, you can assess factors such as the acceleration, handling and braking power. Although this is not always the case some luxury manufacturers boast superior performance. Bankrate tip
Review ratings from third-party rating agencies such as J.D. Power as well as Kelley Blue Book to see whether the performance is worth the price tag. Cars that aren't as expensive can be a pleasure to drive.
Do the safety ratings surpass non-luxury brands? Another aspect to take into account when evaluating a luxury car is the maker's safety ratings. Luxury cars have a reputation for being made of better parts and higher standards of manufacturing. This often leads to better safety ratings for side or front collision, roof strength and crash avoidance features like headlight brightness and crash prevention systems, among other ratings factors. The Insurance Institute for Highway Safety (IIHS) is an independent third-party organization that aims to reduce the number of deaths, injuries, and property damage caused by motor vehicle crashes. The IIHS provides ratings to the majority of new vehicles in various categories of safety each year. When comparing luxury car makes and models, the car's IIHS security rating can be an additional standard to evaluate against other models. Bankrate tip
Before you sign off on the purchase of a luxury car, look for the most secure options less than $25,500.
Are the features offered in a non-luxury brand? From sunroofs to leather seats Comparing various makes or models is that you are comparing the features of many different brands. What you value most may not be in line with the standard package options of a specific type of car. Consider putting in writing precisely what features matter most to you that will help you as you search for your . Certain features of higher quality that consumers are looking for when considering a luxury car include an entertainment system of the highest quality, heated or massaging seats or smartphone integration. Deciding what is most important to you can help keep your emotions in check when you are going on a car shopping. Bankrate tip
Keep in mind that advancements in vehicles are constantly evolving. And more than that, today's luxury car features tend to be the standard features of tomorrow.
Are the investments worth the investment? There isn't a fixed minimum price for the definition of a luxury car, a luxurious car will command a price premium compared to other types of automobiles. They are generally depreciating assets which means that their value diminishes over time. Consider that it's common to find the cost of maintaining luxury cars to be higher than those of less expensive cars. Parts, repairs, labor and similar items will typically be more expensive. Plan for the higher cost of ongoing expenses and the cost of the purchase. Tip for Bankrate
Make use of this opportunity to understand how much your luxury car will cost you monthly.
What makes a fully loaded car differs from a luxury model? Luxury cars don't have a defined 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 many people's minds. And while it's true that cars from these brands come with premium features, you are also paying a little for the prestige that comes with the company's name. Instead of buying a brand with a luxurious name, consider purchasing a standard car. Even a vehicle as basic as a Honda Civic has many different trim options. While the basic package has standard features, pricier trim packages include many more expensive features you might think are exclusive to luxury cars. Take note of the features you are interested in and make your decision based on this. Luxury cars appreciate at a faster rate All vehicles decrease in value when you exit the dealership lot. Luxury vehicles, however, appreciate at a much faster rate than their competitors in the middle. Depreciation that is faster means you're likely to not get back the money you spent on the vehicle when it is time to sell it. Be aware of the factors which can cause quicker depreciation. More on the market. Luxury car owners tend to purchase new cars every few years. This means that the quantity of cars available sometimes exceeds the amount of buyers. Some models are outdated. The people who shell out extra cash to buy a luxury vehicle tend to want all the bells and whistles. So an older model will not get the premium cost that you initially purchased it for. As models age much more quickly. Maintenance for your vehicle. The trips for a body repair can to cost more for newer or foreign models, adversely impacting the value of the vehicle's resale. If you're looking for luxury with no extreme depreciation, consider shopping for vehicles that are instead of new. This way, you will be able to get into the luxury segment without having to worry about cash that has been lost. Finance a luxury vehicle based on the type of luxury vehicle you purchase it is possible to finance it in much the same way you finance any other brand new vehicle. But if your new luxury car ends up being greater than what conventional auto lenders can loan the amount, you might have to think outside the box. Check with the dealer. Some luxury car dealers might have the opportunity to benefit from. Think about placing more money down. If you're having trouble getting a car loan for the total amount of the purchase, you may need to . Arrange your own financing. It is possible to finance your luxury vehicle with a personal or home equity loan. Look into a luxury car lease. If you're looking to buy a luxurious car, but aren't certain to buy, you might a new car. The truth is that a full-loaded standard car as well as an expensive car are both valid options, and no single answer will be right for everyone. Look at the different options that come with the cars you're interested in and ask yourself whether you're just paying for the brand name that's on the car. That can help you decide the best option for you.
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The article was written by Points and Miles Expert Contributor Dan Miller is a former contributing writer for Bankrate. Dan covered loans as well as home equity and the management of debt in his work. Edited 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 control their finances through providing clear, well-researched information that breaks down otherwise complex topics into manageable bites.
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