If you’re in the market for a new or used vehicle, you might be considering if buying a luxury car is worth it. Since there isn’t necessarily a minimum cost or set of features that make a car a “luxury car”, you will have a lot of options available to you. 

How to determine if a luxury car is right for you 

There are a couple of factors that you will want to consider when shopping for the best car for your specific situation. 

Is the performance better? 

If a car’s performance is especially important to you, you will want to pay close attention to the car’s performance ratings. Using them, you can measure factors like acceleration, handling and braking power. Though not always the case, many luxury car brands will have higher performance ratings from third-party reviewers like J.D. Power. 

Do the safety ratings outperform non-luxury brands? 

Another factor to consider when looking at a luxury car is the manufacturer’s safety ratings. Luxury cars have a reputation for having higher quality parts and manufacturing standards. That can often translate into higher safety ratings for side or front impact, roof strength and crash avoidance features like headlight brightness or crash prevention systems, among other rating factors. 

The Insurance Institute for Highway Safety (IIHS) is an independent third-party organization that has the mission of reducing deaths, injuries and property damage from motor vehicle crashes. Every year the IIHS gives ratings to most new cars in a variety of safety-related categories. When comparing luxury car makes and models, the car’s IIHS safety rating is another standard to compare against non-luxury brands. 

Are the features available in a non-luxury brand? 

There are a wide variety of features that you might be interested in when comparing different makes and models of cars. What is important to you might not line up completely with the standard package options of a particular type of car. You might consider listing out specifically what features mean the most to you — that will help you as you look for your perfect new car. 

Some higher-end features that many people are looking for when considering a luxury car include top-end entertainment system, heated or massaging seats or smartphone integration. Deciding what is most important to you will help keep your emotions in check as you go new car shopping. Remember too that today’s luxury car features tend to become tomorrow’s standard features. 

Is the investment worth the cost? 

While there isn’t a set minimum price point that determines what is considered a luxury car, a luxury car is going to command a price premium compared to other types of cars. Cars are typically a depreciating asset, meaning that their value decreases over time.  

Also consider that it’s common for the maintenance of luxury cars to be higher than that of non-luxury cars. Repairs, parts, labor and regular maintenance like oil changes will generally be more expensive. Make sure that you budget for higher ongoing costs as well as the increased purchase price. 

How a fully loaded standard car differs from a luxury brand 

There is not a specific definition for a luxury car — in most cases what people think of as a luxury car depends on the car’s make. Manufacturers like Lexus, BMW, Mercedes or Jaguar are considered “luxury” in many people’s minds. And while it’s true that cars from these manufacturers come with high-end features, you are also paying a bit for the cachet of the brand name. 

Also consider buying a fully loaded standard car. Even a car as basic as a Honda Civic has many different trim options. So, while these cars come in a basic package that has very standard features, there are also trim packages that offer many of the higher-end features that you might think of as exclusive to luxury cars. Think about what types of features you are interested in and make your decision based on that. 

Financing a luxury car 

Depending on the type of luxury car that you buy, you may be able to finance it in much the same way that you finance any other new car. But if your new luxury car ends up being more than traditional auto lenders will loan, you may have to get creative.  

  • Check with the dealer. Luxury car dealers may have special financing in place that you can take advantage of. 
  • Consider putting more money down. If you are having trouble getting a car loan for the full amount of your purchase, you may need to put more money down. 
  • Arrange your own financing. You might be able to finance your luxury car with something like a personal loan or home equity loan. 
  • Look into a luxury car lease. If you are itching for a luxury car, but aren’t sure you want to commit to a purchase, you might consider leasing a new luxury car. 

The bottom line 

A fully loaded standard car and a luxury car are both valid options, and there is no single answer that will be right for everyone. Look at the different options that come with the different cars you are interested in and ask yourself if you’re only paying extra for the name that’s on the car. That will help you decide what’s best for your situation.