Buying and owning a luxury car can be very enjoyable. Luxury cars often have more features than typical models, earn more respect on the road and among your neighbors and come with a better dealer experience. But have you thought about the hidden costs of luxury-car ownership? We've listed a few expensive items you may not have considered.
Since a luxury car is more expensive to buy than a normal car, it will also be more expensive to insure. That makes sense, but many shoppers don't account for insurance rates when buying a car. We suggest you call an insurance agent before purchasing a luxury car, just in case the rates tend to be far higher than you expected them to be.
While some luxury cars are easy on gas, most include big, powerful engines designed for acceleration rather than fuel economy, since most luxury shoppers prioritize performance over gas mileage. Be sure to consider a car's fuel economy before signing the papers -- and figure out exactly how much it will cost you to own and operate per month and per year. If it's not affordable, consider something with a more efficient engine.
Many shoppers believe luxury is synonymous with reliability, but that isn't always true. Many high-end cars are filled with complicated gadgets and electronics, which are often expensive to fix. What's more, many high-end car dealers charge far more for service than traditional dealers, since technicians have to be more skilled to work on complicated electronics and unusual features. Our advice: Before signing the papers, be sure to check out reliability reviews online. And, most importantly, get an inspection from a mechanic you trust.
Tires and Maintenance
It's not just repairs that are more costly. Many luxury cars use specialized parts or tires that are larger than tires from a traditional vehicle. The result is that even routine maintenance -- brakes, oil changes, tire replacements -- can be far more expensive with a luxury car. Also, these parts tend to wear out faster on a luxury car, especially if it's a performance-oriented model. That means you may be spending money for maintenance more often than you thought you would.
Depreciation is another important factor to consider before buying a luxury car. Just how much value is that car going to lose? While typical cars tend to lose a huge chunk of value in the first few years and level off afterwards, luxury cars can and do lose value after three, four or five years, and more. Be sure to consider depreciation when buying a luxury car, since you don't want to lose more than you can afford.
We're not trying to stop you from buying a luxury car. But it's important to understand that, before you do, there may be a few hidden costs you're not considering. Budget for those and owning a luxury car becomes far less stressful, leaving you with time to enjoy your vehicle.