Luxury Cars… Are They Worth It?

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Liron Brunner, Staff Writer

 

I wanted to start off with a disclaimer; I love luxury cars, especially McLarens and Bugattis, and I have nothing against them. In fact, if I were rich enough, the first thing I would probably buy would be a McLaren, but I thought it would be interesting to see if they are truly worth the hefty price tag. I know that there is a level of status and recognition that comes with owning such cars, and they look absolutely beautiful, so I understand that having one is not only a statement, but a reflection of style.

 

As I did my research, I found some very biased opinions. If you look on the Volvo website, for example, you will see that they are extremely in favour of buying luxury cars (most likely because they sell them), but they also made some interesting points. They mentioned how buying a luxury car is buying an experience; the interior, speed, performance and technology are more advanced. Returning from work or school to your luxury car could improve your day, and add to a higher quality lifestyle overall. 

 

On the other end of the spectrum, people’s views are quite the opposite. People believe luxury cars are a waste of money because you are never going to drive 120 mph on a day-to-day basis, or need to go from 0-60 mph in 1.9 seconds. Owning a car in itself is a luxury that many people cannot afford, maintenance and repair can cost up to double that of a new model of a normal car, and in many senses, it is simply practical. In addition to this, when driving a luxury car you have to be extraordinarily careful in order not to damage it and to make sure that the car stays in prime condition. What is the point of spending all that money for a car that never leaves the house?

 

So from a financial standpoint, is the bang worth the buck? Sam Dogen, a financial expert, advises people to employ the 1/10th rule while purchasing cars, which simply means that you should never spend more than 10% of your annual revenue on a car. If you spend more than this, it will cut into money for taxes, hidden fees, maintenance checks, insurance, investments, leisure spending, and more. While there are ways to make sure you don’t lose too much money if you go over budget, the best strategy is to wait until the car value goes down into the 10% range before buying it. 

 

When it comes to luxury cars, whether or not it is worth it is based on: a) how much money you have, b) how much money you are willing to spend, and c) if you are going to use the car. Personally, I see no reason why one, if they can afford it, should not buy a luxury car. They are high quality, very fun to watch, and I am sure even more fun to own! I am not very good when it comes to managing money, but if I wanted to buy the 2021 McLaren Speedtail (an absolutely gorgeous car), I would have to make around 22 million dollars, because the car itself costs around 2.2 million dollars. Of course, in this case I could make less and easily afford this car, as the larger the salary is, the larger the 10%; the gap between the two grows exponentially.

 

Are luxury cars popular? In the Asia-Pacific region alone, the price of luxury cars has risen 3.6% in April of 2019 in the month by itself. Their popularity is growing all across the globe, especially in the U.S and Asia, but only a fraction of the world can actually afford them. For those who can, go ahead, but those who make up the rest of the worlds’ population have to be careful with how they spend their money. Luxury cars are undoubtedly beautiful, but they come with a price that can sometimes reach over six figures, as well as the price of looking like a flashy, rich jerk.