It’s 2020, and the economy is more uncertain than it has been in a long time. Car sales are down, and negative interest rates might be on the horizon. Many car shoppers are wondering whether or not it’s still safe to buy a luxury car—or if owning a luxury car was ever really worth the expense.
Like anything else, buying a luxury car is a nuanced decision, and there’s nothing black and white about it. In this guide, we’re breaking down the pros and cons of luxury car ownership in 2020 so that you can make an informed decision.
Pros of buying a luxury car
Luxury feel and features
There’s no way around it, but luxury cars actually feel more luxurious than other cars. They’re just built that way. Car manufacturers like Rolls-Royce and BMW are known for their luxury experience, with interiors and exteriors that look and feel expensive. Luxury cars come jam packed with features, too. You can expect high quality leather interiors, heated seats, slick dashboards and GPS systems, and other upgrades that will make your life feel just a bit easier. And if you opt for serious luxury, you can get things like cup holders that keep your drink cool or upgraded entertainment systems.
For some people, this end-to-end experience makes it all worth it. Maybe you feel like you’ve worked hard for your money, and buying a luxury car would be fulfilling a dream; when that’s the case, utility vehicles just don’t compare.
Safety and reliability
On a more practical note, luxury vehicles are exceptionally well made when it comes to safety and longevity. In fact, in 2019 the Insurance Institute for Highway Safety (IIHS) rated 11 luxury sedans as the safest on the road that year—including the coveted Tesla Model 3.
Although sometimes “luxury” purchases can be seen as frivolous or impractical, high safety ratings for many luxury vehicles offer a strong counter argument. For example, Volvo has become synonymous with safety over the last decade, and is more expensive than your average vehicle. Mercedes-Benz is a classic luxury car, but is also consistently rated as best in class for safety year after year. Who says luxury can’t be practical?
Low interest rates in 2020
While car sales overall have declined this year, luxury car sales have actually increased. One of the likely factors for this is that interest rates are low right now, which means you can get a great deal on financing a new car.
“Low interest rates, competitive ‘end of financial year’ offerings by dealers, rebounding share prices, easing of virus restrictions and optimism on the economy all may have played a role in lifting luxury vehicle sales,” explained CommSec Chief Economist Craig James in an interview earlier this year.
Low and negative interest rates also mean that it’s less beneficial to keep money in savings right now. If you’re financially comfortable, 2020 might be a good time to buy that luxury vehicle you’ve been wanting.
Cons of buying a luxury car
Higher maintenance costs
When your car is expensive, so is everything else. Whether you need to get basic repairs or swap out your tires, your costs will be higher with a luxury vehicle. In our list of cars with the most expensive headlights to replace, 4 out of 5 on our list were luxury vehicles: Audi, Volvo, Mercedes-Benz, and BMW.
Insurance and fuel costs
First-time luxury car buyers may not realize that car insurance can be more expensive for a nicer vehicle. Luxury cars also need better quality gasoline. This inevitably means more money at the pump every time you need to refill your tank. Combined with more expensive repairs and maintenance, luxury cars are a much higher financial burden than other types of vehicles.
Financial burdens in 2020
When many people are facing decreased job security, luxury cars could prove to be an undue financial burden. Think about the cost when you combine the higher costs for repairs, insurance, and fuel. Luxury cars might not make sense for people who are feeling less financially secure right now. Although there are many upsides to owning a car during a pandemic, the car you own doesn’t necessarily need to be a luxury one.
It’s just like any other car buying decision. Whether or not you take the leap into luxury car ownership is a deeply personal, multifaceted decision. Ultimately, the best choice for you depends on your unique circumstances and preferences. If it makes sense financially, 2020 is a great time to buy the car of your dreams.