Why So Many Drivers Choose Luxury Cars – Should You?

Why do people say luxury cars are worth it?

Luxury cars earn their reputation through a combination of things, including superior engineering, cutting-edge innovation, and meticulous attention to detail. These aren’t just cars to get you from A to B, they’re designed to make every mile more enjoyable.

Brands like Audi, BMW, Mercedes-Benz, and Lexus invest heavily in chassis design, noise insulation, and powertrain refinement. Their engines are often smoother, quieter, and more responsive than those in more mainstream cars. Many come with adaptive suspension systems that can adjust automatically to changing road surfaces, giving you a comfortable, composed ride whether you’re cruising up the M1 or winding through country lanes.

Luxury cars are also often the first to debut new features that later filter down to more affordable models. Think 360-degree cameras, head-up displays, massaging seats, and voice-controlled infotainment systems. Connectivity is usually top-tier too, with intuitive smartphone integration and seamless updates to keep everything running smoothly.

Then there are the latest and greatest safety innovations. Safety is a major reason many drivers make the jump to a luxury car, and premium brands more commonly include the latest active safety features as standard.

Do Luxury Cars Actually Depreciate Faster?

There’s a long-standing belief that luxury cars lose their value faster than regular models, but that’s not always true. Some premium brands and models actually hold their value remarkably well, especially when supply is limited, brand prestige is strong, or demand in the used-car market is healthy.

For example, in lists of the UK’s slowest depreciating cars, Porsche models often feature highly. The Macan holds an impressive 63% of its value after three years according to Auto Trader, while many versions of the 911 are worth more than 50% after five years. Lexus is another brand that holds its value well.

However, the myth isn’t groundless, and some luxury cars do depreciate steeply. Higher purchase prices mean larger absolute losses – even if the percentage drop is lower, the pound value loss could still be rather significant. And some models are more volatile than others – for all that the Macan and 911 hold their worth well, the Porsche Taycan… well, doesn’t. Spec, condition, mileage, colour, and options can also make a huge difference. And of course, past performance when it comes to residual values doesn’t always guarantee future results.

You can mitigate this risk by buying nearly new and letting someone else take the steepest drop in value, and take care to choose the right spec and options to maximise resale appeal – avoid niche customisations that reduce broad market appeal.

Alternatively you could consider leasing…

When is a luxury car not the right choice?

Luxury is a broad term, and there are times and circumstances when a luxury car might not be for you.

If you don’t drive very much and buy the car new, you’ll still lose a lot on depreciation even if you don’t cover many miles. And if you hang on to the car long after the warranty expires, you’ll likely find escalating costs for repairs and maintenance.

The associated running costs, by the way, tend to be considerably higher than more mainstream brands, from insurance, tyres and other consumables to the costs of service and maintenance – premium brands usually charge premium prices. Oh, and there’s a VED surcharge of £425 for five years on cars that cost more than £40,000 when new. That’s on top of the £195 flat rate.

You should also consider the type of driving you do. If you live in a town or city, you may find that a high-end saloon or a large luxury SUV isn’t well suited to urban runs. All the nice leather and fancy touchscreens in the world won’t help if you can’t fit into a tight parking space.