Editorial: The Myth of Vehicular Luxury


My wife and I are friends with a couple who are struggling financially, but who have several well-to-do sets of friends.  When describing their friends’ riches, they refer to their luxury vehicles: “They have a Land Rover and a BMW!”, or “He bought his first Mercedes when he was eighteen!”

They’re currently desiring a luxury vehicle for themselves – not budget luxury like Buick, Lincoln or Acura, but decadent German luxury or Range Rover luxury.  They’ve found that they can purchase a ten-year-old example for a pretty good price!  As a good friend should, I’ve been working hard to dissuade them from making this mistake.  I informed them that maintenance costs would be through the roof and could hurt them financially.

“If you buy a Land Rover,” I argue, “you’ll end up parking it after five months.  Even a wheel bearing is like a thousand bucks to replace.”

“Oh no, our friends love their Land Rover!” is her response.  “They say it’s totally reliable.”

“It’s only a year old though!”

“Well, aren’t BMWS good then?”

“They’re expensive to maintain, that’s why they’re so cheap used.  My manager drove one and it cost her a fortune, always at the shop . . . ”

“But they’re so nice!  Look, here’s one for only nineteen grand!”

“It has a lot of kilometers in it, plus it’s probably been in an accident.  See, the bumper’s a different color?  Look, here’s a RAV4.  It’s nice.”

“But I really wanted one of those German brands!”

“Land Rover isn’t German.”

“Ha, you know what I mean!”

And so on.

Why drive an Explorer when you can drive this?


There’s nothing wrong with aspiring to own fine brands, but when it comes to used vehicles this can be disastrous for lower-income families.  In the city I grew up in, the vehicle of choice for those wanting to appear rich was a Cadillac.  On Christmas 1987, my trailer-dwelling buddy next door called me to come and check out the 1979 Cadillac Diesel his dad had just bought.  I remember sitting in the sumptuous leather driver’s seat as Dire Straits’ “Money for Nothing.” played on the fake-wood trimmed radio.  “My dad listens to music like this!” my friend told me proudly from the passenger seat.


Of course, the car was on the road until summer, when catastrophic engine problems removed it from the road permanently, and his family went back to driving his mom’s decrepit old G-body for the next couple of years.

What do the experts say about luxury vehicle ownership by the non-rich?  A study from the Federal Reserve details luxury car ownership (limited to Acura, Audi, BMW, Cadillac, Infinity, Jaguar, Lexus, Lincoln, Mercedes-Benz, Porsche, Saab, and Volvo) and who buys them.  The study shows that lower income households “tend to own a luxury vehicle for a relatively short period of time before switching back to non-luxury brands.”  The study hypothesizes that “many discover the (marginal) realized utility incompatible with their budget conditions”, which suggests that low-income owners don’t find the luxurious driving dynamics and fine material quality to be a good trade-off for cheap operating costs, interior space, sliding doors, easy flip-down seats, and easy-to-clean interiors.

Our (non-rich) neighbor, a salesman with three kids, thought a slightly-used 2007 Jaguar S-Series would serve the needs of his family while also impressing his clients.  Like many, he had a nightmarish experience with it until he finally put it up for sale in disgust.  Listed under market, I briefly considered buying it until he talked me out of it himself, complaining that the heated windshield itself cost $1300 to replace, the Xenon headlights several hundred, and the fact that there was always something wrong with it.  He had endured seven years of vehicular misery whereas a non-lux brand could also have been luxurious with far fewer headaches, serving his needs perfectly. 


One could argue that operating costs can be kept down by performing your own maintenance, and there is an element of truth to this.  Brake pads, rotors, coil packs, tie rod ends and ball joints are universally similar among vehicles, though component pricing may differ between brands.  Often, these components are the same between the parent/child company (i.e. the coil packs between a Tiguan and an Audi Q5 are identical and dead simple to replace).  However, engineering complexity and luxury features can start to throw a wrench in the plans of do-it-yourselfers.  Changing transmission fluid is highly important in my opinion, but I would not be comfortable changing the transmission fluid in an Audi Q5 DSG, given that it’s under pressure and it’s a “do it right or plan on replacing your transmission” proposition.

As my neighbor found with his Jaguar, an ability to do mechanical work does not change the cost of complex individual components such as Xenon headlamps and heated windshields.  Yes, you could convert to cheaper components (e.g., Xenon to LED headlamps) but then you’re diluting the luxury experience that you paid for and desired in the first place.   Finally, most luxury buyers are simply incapable of doing their own maintenance, and the requirement to be a mechanic to affordably drive a luxury automobile seems self-defeating, unless you truly enjoy the work.

Some desire to gain social status and recognition by showing off their pricey new vehicle.  A luxury vehicle might seem like a good way for low-income households to bolster their social standing, especially as gaining valuable social contacts grows in importance.  These social status signalers expect to be rewarded with preferential treatment by their show of conspicuous consumption.  However, it appears that low-income luxury buyers find that they do not enjoy the appearance of conspicuous consumption, that their budget does not support it, or that their imagined new social status never quite materializes.  The study concludes that: “Households buy luxury vehicles due to social status signaling motivations that might retreat after a certain image is established and no longer supports conspicuous consumption.”

Recently, some cash-strapped acquaintances purchased a BMW X3 on credit, believing that the options trading course they are taking will soon lead them to vast riches. ‘Dress for the job you want, not the one you have,’ right?  ‘Act rich, become rich.’ ‘Don’t validate your poverty by living poor.’ – all the motivational slogans they’ve learned from those financial gurus leading them into trouble while relieving them of the little money they have.  I fear that these ideas and decisions won’t end well for them.  Rather then bolster their social cred, the vehicle is making people wonder why they’re spending so irresponsibly.

Much of our misguided impressions of the lives of the rich are driven by the media and advertisements.  Boomers and many Gen Xers grew up reading Archie comics depicting Mr. Lodge tossing money around like confetti, Richie Rich also being a part of this literary diet.  Earlier generations longed to be new-England accented versions of wealthy Hollywood stars.  Younger generations want to imitate their rich and socially conscious pop heroes and rich anti-heroes they see on Netflix.  People desire to emulate their idea of what ‘wealthy’ looks like and a luxury vehicle is the commodity of choice (though luxury opinions are also gaining in popularity, but that’s a different subject).

Ye for him


Do the rich really live as extravagantly as imagined?  From what I can gather personally, the average millionaire is far more “down-to-earth” than many would think.  Most aren’t retired.  Most go to work every day, working and saving.  Most don’t drive luxury vehicles.  Most live relatively humble lives.

USAToday study from 2017 shows that the rich (those who earn $200,000 or more) tend to drive Toyotas, Hondas and Fords as the rest of us.

. . . the most popular cars for high-income Americans are pretty much what everyone else drives, notably Fords, Jeeps and Hondas.

The Ford F-150, which is already the most popular vehicle in the U.S., was also tops among those earning more than $200,000 a year.

Next came the Jeep Grand Cherokee, Honda Pilot, Jeep Wrangler and the only compact car in the top five, the humble Honda Civic.


Vehicle joy can be wonderful, but is easily misunderstood by the public.  Unlike what marketing would have you believe, vehicle enjoyment may not come from luxury badges or features, envious stares from neighbors, or perceived value.  Owning a $2500 Sentra can be more enjoyable than a $60,000 Mercedes, perhaps for emotional reasons I can’t fully explain, or reasons exclusive to an individual.  Aside from my opinion that fancy cars look odd parked in front of a humble home (“Who’s visiting them?”), door dings and parking lot scratches are very unbecoming on a Mercedes, but are part of life when you shop at Costco or Walmart.  Kids carry backpacks, zippers and mud, and are very hard on vehicles.  Owning a 2016 Caravan is no problem in these scenarios.  In a 2016 5-series?  Not so much.  I wouldn’t be okay with my child walking on white BMW leather seats to fetch something from behind.

Ultimately, of course, people can do whatever they want with their money and lives; my opinions don’t matter, however entitled I may be to them. We live in a free society, and if someone wants to install a pool, get plastic surgery, get a bad tattoo, or buy an Audi on credit, that’s none of my beeswax.  I hope to own a Lexus IS350 one day when I have the financial means, even though a Camry would be perfectly adequate.  I may choose to buy a classic Beetle.  And if our friends choose to fulfill their dream of used German luxury, I’ll support them and be happy for them, as a friend should.