Why Do People Buy Expensive Luxury Cars?
The automotive market is packed with options, but every car basically serves the same purpose: getting you from point A to point B. With so many lower-cost, suitably constructed cars available, why would anyone purposefully pay 3-4 times more for a high-end premium model that ultimately still does the same thing? What’s the value in buying an expensive luxury car instead of a sufficient mass-market one that costs far less?
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What makes a luxury car worth paying the higher price?
Impression: Some car brands are inherently more impressive than others. A Porsche will always raise more eyebrows than a Nissan will. Luxury car owners enjoy — and in some job situations, need — the prestige that a more elite vehicle carries. Sometimes it’s better to be seen as successful than as frugal. It’s the same as your clothing: When you’re out to impress, would you rather be seen in a suit or in sweatpants?
Performance: One way in which premium cars always warrant their higher costs is in their performance. The majority of mass-market vehicles are engineered to achieve a balance of fuel efficiency and sufficient performance without raising the cost of production too high. Affordability is prioritized over top-notch engineering because optimizing a vehicle to achieve next-level performance costs the manufacturer — and thus the buyer — more money. On premium models, the higher price tag allows designers to craft a better machine that some buyers are willing to pay more for.
Customization: The more you’re willing to pay for a vehicle, the more influence you have over its design. Mass-produced vehicles come in a limited array of colors and feature packages, so you’re stuck with whatever the manufacturer offers, unless you’re willing to pay for aftermarket customization. When your order a brand-new high-end car, though, the automaker will oftentimes offer more ways to tailor your car to your preferences. For instance, BMW allows customers to pay extra for special paint hues and personalization touches. Ritzy Rolls-Royce cars let buyers determine practically every aspect of their car.
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It’s a hobby: For some people, owning a car is a passion, not just a necessity. Everyone’s expendable income goes to some leisure that interests them, and for some people it’s cars. Owning a more select brand or model also draws enthusiasts who form a fan community. You’re more likely to find a Ferrari club in your neighborhood than a Toyota.
Treatment: Premium brands and dealerships don’t take their customers for granted. They strive to treat their customers better because they’re paying more. So from the initial purchase to the service appointments to exclusive brand perks (like concierge services), being a customer of a premium brand gets you more pampering and attentiveness. That’s why luxury brands typically report higher customer satisfaction rates than non-premium brands.
Quality: Luxury cars generally are of better quality than non-premium cars. That’s not to say mainstream models aren’t well-made, but the components, craftsmanship, and construction of a high-end car generally exceed the utilitarian qualities of a mass-produced car. However, that doesn’t mean a premium vehicle is more likely to retain its value than an economy-class car. So, don’t assume that a luxury car is a good purchase if you’re looking for a lucrative financial investment.
If you have the extra money and want to get more enjoyment out of the car you drive, a luxury vehicle can bring a level of gratification most mainstream, affordable cars can’t promise. Just make sure you don’t pay more than you can afford on a fancy car, or else that enjoyment could backfire.
Aaron is unashamed to be a native Clevelander and the proud driver of a Hyundai Veloster Turbo (which recently replaced his 1995 Saturn SC-2). He gleefully utilizes his background in theater, literature, and communication to dramatically recite his own articles to nearby youth. Mr. Widmar happily resides in Dayton, Ohio with his magnificent wife, Vicki, but is often on the road with her exploring new destinations. Aaron has high aspirations for his writing career but often gets distracted pondering the profound nature of the human condition and forgets what he was writing… See more articles by Aaron.