Luxury Doesn’t Always Mean Expensive

Many of us hear the phrase “luxury car” or “luxury vehicle” and think the word luxury excludes us. After all, aren’t luxury vehicles the province of well-to-do athletes, high-flying executives, and sybaritic rock stars?

While all of those groups do purchase luxury vehicles, it doesn’t mean a luxury vehicle is out of reach for the average person hoping to buy a new car.

“It’s not as expensive as people might think,” explains Tom Claridge of Claridge’s Ltd. of Fremont, which sells Mercedez-Benz and Porsche luxury vehicles. “Financing and leasing programs both make owning a luxury vehicle fairly easily affordable.”

Claridge says that leasing particularly, which usually requires a smaller down payment, yet offers competitive interest rates as well, “can lower the payment considerably.”

However, the affordability factor needs to be put in perspective. “Generally, people who have the money and don’t need as much financial help purchase luxury vehicles,” says Dave Cavanaugh of Cavanaugh Motors, a Chrysler dealership based in Alameda. “You have to realize that the average down payment in the luxury market is around $10,000 or $15,000,” he says. “So, a $1,000 incentive, one way or the other, often doesn’t make a lot of difference on a $40,000 or $50,000 car.”
That means someone just entering the work force at a low-wage job probably isn’t able to afford a luxury vehicle. However, for adults well-established in their careers, or those making good money from the start, the differences between a middle-of-the-road vehicle and a luxury vehicle are not as vast as they seem.

Part of the reason is the very definition of luxury, which most dealers say starts with cars priced in the $30,000 range and goes upward.

“If you’re buying cars in the $20,000 range, they may be high-end cars, but they’re pretty typical,” explains John Cabral of Acura/Volvo/Lexus of Pleasanton. “Yet, $30,000 will get you into a Volvo.”

Add dealer incentives and/or special leasing terms, and the costs of the two vehicles come much closer. “With a special lease, for example, you may be in a $30,000 Volvo, and the car may be just as affordable as a Honda in the $20,000 range,” Cabral notes.

And the difference is often more than just a nameplate. Since luxury vehicles are often the harbingers of new trends in safety, comfort, and style, the luxury vehicle is often the better value. “The cars may have a lot of the same features even, but the difference may be that in the lower end car, the options are extra, whereas they come standard in the luxury car,” Cavanaugh adds.

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