LexFather

Its been a few months since we have done this. I kind of volunteered him this time, but I am sure he doesn't mind.

So what questions do you have? It can be anything.

I'll start with a topic. While we talk new cars a lot, keep an eye out for the used/certified market.

The market is being flooded with more and more luxury branded cars since each brand for the most part is selling better than ever.

So two things can happen
1. A person buys a used luxury car/brand, has a great experience and possibly buys a new one or buys from the dealer, starting brand loyalty, though the car is not entry level.

2. A person buys a used luxury car/brand, it turns out to be a complete turd, and they tell all their buds and buy another brand next go round.

Look for car makers to push certified sales more and expand their certified programs. Lexus and BMW lead in this area.

PhilipMSPT

iTrader: (5)

Used cars are great for a lot of people that want luxury cars but don't want luxury prices.

Unfortunately, Lexus, BMW, and Infiniti hold their value so well that's it's relatively difficult to enjoy "the experience of owning one." However, it does indicate brand loyalty and quality.

As for other luxury automakers, if resale values are poor (such as Jaguar and Land Rover), it may not signal good quality. Yet, those can be excellent bargains if you know what you're getting into.

I think that luxury used vehicles can be great bargains when compared to other new cars out there on the road. For example, the CLS was hot when it debuted, but you can find a two-year old CLS for about half the price if you look hard enough...

92 SC400

Funny you mention that about the CLS - my friend went car shopping this weekend he was offered $44k from Lexus for his early '06 CLS with 30k on it. He did trade it in at Land Rover though for $47k I believe.

And yeah the BMWs seem to hold their value well - looking at the pre-owned ones at some dealers and what they want for them you're almost better off just buying new.

mmarshall

Yes. The best buys for luxury vehicles like that, with questionable reliability are newer, well-maintined, relatively low-mileage ones that still have a good chunk of the original factory warranty left....assuming the warranty is transferrable. That way, you get the best of both worlds. First, you have taken advantage of the fact that these vehicles depreciate sharply in the first couple of years, saving a lot on the up-front purchase deal, and, Second, despite the likelihood of reliability problems (and with Jaguar and Land Rover that often includes electrical problems that are hard to diagnose), you still have the general peace of mind of at least a couple of years' warranty left.

Usually, when you see used Jags or Land Rovers on the lot, it means one of three things. One, you've got somebody filthy rich who has more money than sense and gets a new one every couple of years or so just for the panache of it, Two, it's the opposite, someone bit off more than he or she could chew with the buy/lease payments and it got repossessed by the dealer, or Three, somebody paid a lot of money for that vehicle and just got tired of reliability problems. Either way, if the vehicle is in good shape (and Certified Used Vehicles have to pass well over a hundered tests and inspections, including my own if I'm there as part of the deal ) you as the secondary buyer are the one who makes out on the deal. Of course, with a used car, despite the hundred-plus inspection points on Certified ones, you won't always get the nice new-car smell or a perfect body without scratches of any kind, or the guarantee that it hasn't hit any good-sized potholes...that's just part of the trade.

And there is also a fourth group.....those vehicles coming off of normal two-to-four year leases and are put back on the market for resale (or in some cases, re-lease......more and more manufacturers are leasing used cars now). These cars, however, depending on their age and mileage (lease contracts usually allow 10,000-15,000 miles a year), may not be quite the bargains of the previous three groups, because around the three-year mark or so, the depreciation curve starts to flatten out, and they stop depreciating so fast. So, in general, you will save a greater percentage of the original new purchase price by getting a two-year-old one than a four-year old one....in ratio and percentage points as well as total dollars.

mmarshall

Yes, I tried to cover that topic in my last post. And leasing is often for people who want NEW luxury cars without paying luxury prices. Where I live, here in the big-money and big-car-sales D.C area, even with a lot of well-heeled car buyers, leasing basically keeps a lot of luxury and up-market dealers in business. That is because many potential car shoppers, unlike those of us here on CAR CHAT who evaluate a car thoroughly and discuss vehicles day and night, are concerned mostly with monthly payments and little else. That's often their first question....."How much is it going to cost me each month", without even considering questions like how much they are getting for their trade-in or what the down payment will be, and how the dealer comes up with that figure. Some people, believe it or not, sign on the dotted line without even a test-drive. Others, especially in this well-diverse area, don't speak good English, and allow salespeople to take advantage of that by slipping in things they may not understand.

New-Car-Itis also plays a large role in impulse-buying and leasing. A perfect example of that, in the sport/luxury car buisness, is the BMW M-Cars...vehicles which, of course, are glorified to no end in the auto press and are presented as magic-carpet sports machines. A young guy (often a Yuppie) struts into a BMW showroom, sees a nice new M3 or M5 sitting there, remembers how the guys at Car and Driver, Road and Track, and the other enthusiast mags all drooled over it, finds out from the salespeople (after they manipulate a few figures) that, with a good down payment, he can lease one for about the same monthly price as a purchasing a more bread-and-butter 3 or 5-series, and bingo, an hour or two later, another new M hits the streets.

mmarshall

That's because of the excessive hype they get in the auto press.........it has kept demand for them up, new and used, despite their unreliable electronics and the difficulties of using the I-Drive. The auto press is addicted to their superb power steering, handling, and chassis dynamics......and I have to admit, in those areas they do have something.

mmarshall

OK, 1SICK, I've got one for you, based on your own post:

How would you define the term "luxury" as it refers to vehicles? Today it seems the term is being used for everything from Town Cars to AMG Mercedes to Cadillac Escalades to Maybachs and Rolls-Royces. How would YOU define it?


Anyone else, too.........feel free to post your definiton.

bitkahuna

iTrader: (20)

The problem with used luxury cars is that all luxury cars today are FILLED with technology, and as we know, the technology changes quickly and thus ages quickly. Who wants an original iPod? Who wants a car with a slow nav system that uses CDs? Like BMWs did until just a couple of years ago. Who wants a car with a cassette player? Oh wait, the current GS still has one. Who wants a car without side and other airbags? And maintaining older technology gets more and more expensive as the car ages. After a while there's a real shortage of parts or in some cases no parts except salvage.

Sure some people want these things, there will always be a market at some price. But as these cars get MORE sophisticated, they will age even more rapidly, like yesterday's PCs.

Incendiary

What's the deal with people bagging on those who lease? It may cost less to lease than to finance if you use same downpayment and same term (# of months), but in the long run it costs way more to lease. So if anything, those who lease are just paying up more because it's not as if they'd lease an SL65 AMG for three years and then get a used Echo for the next six.

I think I can answer that. Sick believes: RWD, V8+, prestige/history of nameplate, larger cars, latest technology, and excellent service by the dealer. Did I leave anything out?

92 SC400

To me luxury is all about what the car can and will do for you. The less you have to do physically to get things to function than the more luxurious the car is IMO. I dont really think the two coexist - or not very well at least IMO. I think they should be separate and two entirely different things. No matter how much an M, Ferrari, Lamborghini, etc., cost I will not consider them "luxury," rather I think of those are "sports cars." Car like Lexus, non-AMG MBZ, Maybachs, Rolls, Caddy Escalades are, IMO, luxury cars.

LexFather

Incendiary said a lot of it for me. I'll post my thoughts soon. I will say its clearly more than a nice car or SUV. Its the total package as he stated.

mmarshall

True.....and a lot of older guys like me are not into that kind of stuff. We like our cars luxurious (and sometimes sporty) but simple. For one thing, we learned, years ago, to DRIVE, not sit back on our ***es and let electronics do everything........things like Infiniti's Lane Change camera, Mercedes' Radar-Adapting Cruise Control, Brake Assist that slams the ABS on full-force (when you may not want full-force), etc....

mmarshall

True.......there are a lot of variables, but in general, it costs less to lease than to buy if you look at just monthly payments alone. And leasing also has convienences as well....you don't have to concern yourself with haggling over trade-in value, you don't have to advertise the car and find a buyer, you don't have to take chances with strangers on a test-drive, you will always (or almost always) have a car under factory warranty if anything goes wrong, and you will have a new car with up-to-date features every 2-4 years. In some cases, you can also deduct the lease payments on your taxes. Then you just hand the keys over at the end of the lease term and pick out another vehicle. All you have to do is stay within the mileage limit (usually 10,000-15,000 miles a year) and take reasonable care of the car...........but even if you exceed the mileage limit, no big deal. You just pay a little more when you turn the car in.

Now, there is one case where what you say IS true. Leasing probably does cost more in the long run if you choose a car with a low projected residial value and high depreciation (the Kia Amanti and Lincoln Town Car are good examples) and continue to do so each time you get a new car at the end of the term. In that case, you will never own the car outright, and be stuck with never-ending high monthly payments......they will add up over time. But even then, you can still make out if you choose to purchase the car outright at the end of the lease term (most terms nowadays give you that option), because you will then owe only the car's low residual value....and end up with a car with relatively low miles.

Yes.............a hefty price sticker on the window.

bitkahuna

iTrader: (20)

Luxury is an indulgence, having more than is necessary. It provides a positive emotional experience beyond just the 'utility' of, in this case, getting from point A to point B.

Luxury is also perceived directly by our senses. Touch, smell, sound, and what we see. A surface can be 'functional' or it can beautiful, feel nice, smell nice, make a nice sound (say a button or control).

Luxury requires huge attention to detail because people's perceptions are very quick and always right for them.

And finally, for many, luxury is about status, about having something to show off, having something others don't. It's saying look at me, I'm successful.

I just sat through a presentation on how people evaluate model homes when they look at them. It was very interesting and I think it's probably quite similar to cars. Take a kitchen for example, when someone goes in they look at counter tops (ooh, nice granite) they touch it, they try the cabinets and draws, they see the brushed stainless appliances, etc. Comparing a higher end home with a basic home clearly shows luxury from utility.

mmarshall

OK....you definition noted.

I guess I just have a hard time accepting what many people today call "luxury" in a car..........a boatload of electronic toys, huge wheels with low-profile, rubber-band tires, drag-race acceleration, etc.....

My idea of "luxury" in a car, nutured over decades, was a 4500-5000-lb. curb weight, pillow-soft suspension and tires, whitewall tires, hood ornaments, vinyl roofs, power everything inside, a lot of interior wood trim, library-quiet noise levels, concert-quality stereo, and a butter-smooth drivetrain. The Cadillacs of the late 50's-early 60's, the big Buicks of the mid-late 1960's, and the Lincoln Continentals of the late 60's-late 70's probably signified this better than any other cars I can think of. But those cars, for the most part, went out with the gas shortages of the 1970's, and, sadly, have never returned (the Buick Roadmaster and Cadillac Fleetwood returned but died in 1996). Cars like the Lexus LS460 of today may be more reliable and have library-quiet noise levels, killer stereos, and nice wood trim, but they still lack the big, HEAVY feel, interior space, and ultra-smooth ride of the luxury cars I grew up with....and many of the parts and hardware that used to be durable metal is now mostly plastic.

However, that's not to say that it's all bad. Luxury cars today, besides the obvious improvements like electronic ignition/engine controls, disc brakes, fuel injection, ABS, clearcoat paint, etc.... also have some things that luxury cars in the 1960's couldn't dream of, like car-based AWD with center differentials for all-weather traction..........truly one of the greatest automotive inventions of all time.