There’s a rut that many people find themselves in with regards to their car: They want something nicer, but they believe that driving a luxury car is cost-prohibitive. They believe that only those with garbage bags full of disposable cash can afford to roll around in a Benz or Audi. That is – for the most part – simply untrue.
Luxury cars don’t have to be for the upper crust of the upper crust. They can also be for those individuals willing to think smartly about their vehicle and finance choices. There is a way that you – whoever you are, and whatever your budget – can get behind the wheel of a luxury car.
In order to get you there quickly, let’s take a closer look at the three most critical factors in automobile affordability – age, type of finance and model.
The Massive Difference Between New and Used
You’ve probably heard that old dealership adage that cars drop 30% in value the moment they are driven off the lot. That’s a little bit of an exaggeration, but the rate of depreciation is certainly significant during the car’s first year, and the vehicle continues to lose significant value (roughly 10% per year) through its first five years.
What that means for you, the prospective luxury car driver, is that it makes much more sense to go for a car that’s, say, five years old, as opposed to one that’s sitting on the lot. You will end up paying much less for a car that is only a couple years old. Provided that you get your car from a reputable dealership with competitive prices, a used luxury car can be “just like new”.
The Car Lease Advantage
Next, you have to decide whether you are going to buy or lease a luxury car – and the decision should be a no-brainer. When buying a car, you need to throw down a sizeable down payment, and then pay the rest of the car off in instalments.
With leasing, however, there is often no down payment, and, rather than paying off the entire car, you only pay for the cost of its depreciation. That means lease payments are often significantly less expensive than traditional monthly finance payments.
If you’ve ever decided that you can’t afford a luxury car, chances are you were looking at purchase prices and financing. Once you switch to leasing, a whole new fleet of fantastic cars opens up in your price range.
Entry-Level Luxury Cars
Finally, the model you choose matters. For instance, you might not be able to afford the Mercedes S-Class (which, when new, is north of $100,000) but there is a good chance you can afford the A-Class (which, when new, is around $34,000). That’s a huge difference, even though they are both incredibly well made cars, and most definitely both considered “luxury cars”.
The bottom line is that, provided you have a reasonable budget, you can afford to drive a luxury car. Maybe you though you couldn’t. Maybe you though you were stuck with your current clunker for the foreseeable future. But by leasing used luxury cars from less expensive classes,