I decided to write a little bit differently for this post and share some things I've learned from buying and owning a "luxury" car. If you are looking for a new car now or maybe in the future, keep scrolling for some food for thought of what I've learned over the past few years..
Something to definitely keep in mind when making a luxury vehicle purchase is how quickly your car will lose value once you drive away. My car is a 2012 Audi A4, which we bought when it was 3 years old. We paid $20000 for it, but when it was brand new it cost nearly $40000. In 3 years it had lost half its value. Many other luxury cars have a 60% depreciation rate after only 5 years! If it matters to you to have the newest model you may want to consider leasing a vehicle, which I will touch on later.
2. Cost of Regular maintenance
Ok so now you’ve bought your car. Awesome! One good thing I’ve found about luxury cars is they require regular maintenance less often. Yay! However when you do go in for that oil change or spark plug replacement, you are going to have a shock when you see the bill. For my Audi, just an oil change sets me back $200 at the Audi dealership maintenance center. And for the more in depth regular maintenance every other oil change? $2000! I have found a trusty ma and pop shop close by that does these services for half the price Audi charges, but these costs can still really set you back, and are MUCH higher than services on a Ford or Honda. I’ve read that some luxury car brands are starting to offer covered maintenance for the first couple thousand miles when you buy brand new, but this is voided if you buy the car used.
3. Cost of gas
Because luxury vehicles are high performing machines, they require a higher quality gas to ensure optimum performance. That means the manual stipulates using the 91 premium gas. For those not super gas savvy, that’s the very most expensive one at the bottom of the gas price board. From what I’ve understood, this gas is the cleanest and won’t have much gunk to build up in your engine overtime. While this gas is typically only $.20-$.30 cents more expensive than the cheapest gas per gallon, this can add up over time. My car has a 15 gallon tank, and I fill up on average once per week. That’s approximately an extra $240 A YEAR I’ve spent to fill up with premium gas. Ouch!
4. Cost of parts
Similar to the cost of maintenance, the cost of parts and repairs are EQUALLY outrageous. Funny story: last year I went to a job interview. It went great and I got the job! I went back to my car, put it in reverse to get out of my parking spot and...nothing. My car wouldn’t reverse! I called a tow truck but naturally it didn’t show up until everyone left the office for the day (including the woman who interviewed me) and blocked every one in their spots while he tried to get my car up on the truck. Way to make a good first impression Sydney! Anyway, turns out my car needed a brand new transmission. With parts and labor, the total bill came out to over $15000!! Luckily (!!) we had bought an extended warranty when we purchased the car (because the manufacturer warranty was close to expiring) that covered EVERYTHING. In the future, I will always purchase an extended warranty. The price varies, but we bought this warranty for $1500 at the time we purchased the car. We ended up saving around $14000! With the cost of parts for these cars, I would highly recommend to be protected under a warranty.
5. Lease vs own
As I mentioned recently, luxury cars lose value quickly. They don’t hold value like other investments, i.e. a house. My first car was a 2004 Mercedes C class. It was such a sweet car, and was top of the line in 2004. My parents bought it for me in 2010 for $20000, and I sold the car 5 years later in 2015 for $5000. It was still in pristine condition and under 100k miles, but it had still lost so much of its value. Therefore, I don’t find the investment of purchasing a car as beneficial in the end as buying a house, which can essentially zero out the price in the end, if not actually make you money. But when you rent a house, you will never see that money again. In reality, it’s just not the same with a car. If it is important to you to drive new vehicles, leasing may be a better option. Regular maintenance is typically included, and after a few years you can just swap it out for a pretty new one (with that amazing new car smell!) Something to think about!
Thank you for reading! This is definitely a different type of post for me, so I would love to know what you think in the comments below. Let me know if you want to see more posts like this in the future!
Live for luxury? No trust fund, no problem!
Join the fancy free journey as we seek the
finer things in life, sans millions.
- Marie Claire, September 2016