If you’ve ever seen a Porsche, Ferrari, or Bentley pass by you on the road, the thought of what it would be like to own a vehicle of that caliber has probably crossed your mind at least once. Before getting blinded by all the flashy aesthetics and advanced capabilities, however, it’s important to be aware of the negative aspects to owning a luxury vehicle prior to making such a large purchase. Below, we will address some of the main downsides of buying a luxury car.
While there are several ways you can save money when purchasing a luxury car—such as buying used—there’s no mistaking the fact that they are expensive. On the lowest end of the spectrum, entry-level luxury cars can cost around $30,000 to $50,000. On the higher end, brands like Porsche and Ferrari sell luxury models for anywhere between $100,000 and $300,000 dollars. If you’re interested in a classic or limited-edition model, price tags can escalate even higher.
Cars are known for their high depreciation rates. Luxury vehicles are no exception. While some models depreciate less than others, you can expect a luxury model to lose several thousands of dollars in value in just a couple years.
According to Investopedia, luxury vehicles typically lose an average of 40 percent of their value after just five years. When purchasing an expensive model around $100,000, a loss of $40,000 can be expected. As such, if you’re interested in getting a higher return on your investments, you may not want to purchase a luxury vehicle.
The higher costs of owning a luxury car don’t end after you pay the purchase price. Another one of the main downsides of buying a luxury car is the insurance costs. When owning a luxury car, you should expect to pay far more on your insurance bill each year.
After all, luxury vehicles often cost far more than their more economical counterparts. As such, insurance companies will need to increase their costs in order to provide you with the coverage you need in case an accident occurs.