With a sluggish economy and opinions still being volleyed over the federal government stepping in to prop up domestic car companies, why even think about picking up a luxury car like Porsche or BMW?

While it might seem counter intuitive, a down economy might be the time to consider such a luxury vehicle.

Everything from American-made SUVS to compacts have come under fire in recent years due to fuel inefficiency issues, and are in large part what prompted the government to shape its “Cash For Clunkers” program. The simple premise of trading an old, fuel-inefficient model for a new, more fuel efficient one at a discount seems to be bearing some fruit. Typically not known for their fuel efficiency, luxury vehicles are at least as guilty of this as their more affordable counter parts. A key difference, however, is that they are more typically described as “investments” rather than “money pits.” There are several good reasons for this.

That Certain “I Don’t Know What”

What’s in a name? Quite a bit, if that name is Porsche, Audi, BMW, Jaguar, Rolls Royce or the like. Most of these companies are not only associated with high quality and high price tags, they crank out fewer of them. And an inherently smaller market makes each one of their vehicles a relative rarity.

While not immune to depreciation, luxury vehicles do tend to hold their value longer than other types of vehicles. This is in part due to market forces: So long as people dream of having a luxury vehicle, and have the means to buy them, companies will continue to supply them.

Even with luxury items, it’s human nature to find the best deal. A considerate consumer, it seems, can always find ways to save money and get what he or she wants. With any vehicle purchase, some of the best practical advice is to choose a quality model, in a desirable color with popular features that will help it retain its value. Keep the car well-serviced and maintained.  It all sounds simple, but how to get a deal?

In such a dour economic climate, a dealer may be more willing to haggle in order to move the product. That might be especially true during the gap between the time the “Cash for Clunkers” vehicles roll off the lot and the time it takes for the government reimbursement check to arrive. Dealers who have had a few high end models they haven’t been able to move may be more willing to do some incentivizing of their own to keep sales flowing.

As with any major purchase, weighing the features you want with what you can afford should take into account the total cost of ownership for that vehicle a good deal in the long run. The purchase price is only part of the equation: The costs of luxury car ownership include financing fees, registration fees, insurance premiums, operating costs, and, yes, depreciation. 

The Interest in Appreciation

Whether used for everyday driving or for a weekend outing, all vehicles are subject to the same forces on the road. So why do some cars hold their value better than others? Depreciation is determined in large part by market forces. If a car is isn’t comfortable, reliable, or aesthetically pleasing, it will likely depreciate faster than one that is. By the same token, the reputation of a car with superior handling, comfortable and looks precedes it.

In some instances, well maintained vehicles of certain vintages actually appreciate in value.  Only time will tell what a “vintage” year will be. In the meantime, should an owner ever decide to trade or part with a luxury vehicle, chances are he or she won’t be taking much of a loss. And down economies have a way of turning upwards, bringing with them the potential for a larger buyers’ market for luxury goods.

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Tags: indianapolis auto repair, luxury auto service, Luxury Car Care

This entry was posted on Wednesday, November 4th, 2009 at 7:34 am and is filed under Luxury Car Care. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.