Why You Should Not Buy A Luxury Car

The median price of a new car purchased in the US is around $37,000 and has been creeping up at about a 2% rate every year.  A strong economy and job market, and low-interest rates have no doubt contributed to the strong demand.

Experts recommend buying a car that costs 1/10th of your gross income.  That is if you are making $150,000 a year, buy a car that costs $15,000.  No one I know follows that rule. Most of my friends own flashing BMWs and Audis, that cost north of $50,000 when they make around $100,000 a year.

I personally prefer a reasonably priced car that is reliable and doesn’t cost much to maintain over the long run. I also like to own my cars for at least 10 years. I don’t understand why people feel the need to replace the car every 4 or 5 years.

I bought a new Toyota Rav4  a few years ago.  I haven’t had any problems with it. It’s easy to maintain, and the insurance costs are reasonable.

Here are the reasons why I don’t like expensive cars.

Invest The Extra Money

As I mentioned before, I would rather buy a cheap reliable car and invest the rest of the money.  That way my money is invested in a growing asset, rather than a depreciating asset like a vehicle.


All cars depreciate the moment you drive off the dealer’s lot.  But the depreciation is very high for luxury cars. I don’t like to own something that loses $5,000-$7,000 a year. I prefer investing in appreciating assets.

Stress of Making Payments

I prefer to pay cash for my vehicles.  I have many friends who own expensive vehicles but are struggling to make payments.  They also take out 6 or 7-year loans to keep the payments affordable.  A loss of a job or a pay cut means that they would struggle to make the payments.  I would rather not have that kind of stress in my life.


The more expensive the car, the more expensive the insurance.  Expensive cars have fancy features that will be expensive to replace if you ever get into an accident.


Simple maintenance such as an oil change can cost you more than $125 if you own a luxury car. Oil change on my Rav4 costs me $45 at the Toyota dealership.

Regular maintenance items such as brake pads, tires can cost a fortune on a luxury vehicle.

If you own a luxury vehicle, you are more likely to get minor dings fixed because it affects the appearance of an expensive car. I can drive my Toyota Rav4 with dings and stretches until I sell it.

If You Have Kids, Cheaper Cars Are Better

I drive around a lot with my son.  Though he has gotten better, he still creates a mess in the car.  He tends to spill drinks or drop food in the car.  That doesn’t bother me.  I can clean up the mess myself.

I am not sure I would so forgiving if I owned a car that costs $75,000, and my son creates a mess every week in the back seat. Also, I don’t want to be the kind of parent that gets mad at young kids for doing what young kids do.


Some of my friends and colleagues believe that owning a nice car adds to their image, and enhances their reputation.  I would rather drive a cheap car and be wealthy than own an expensive vehicle and be struggling financially.

Bottom Line

Expensive cars are not just expensive to buy, but they are expensive to maintain.  They will continue to drain your bank account as long as you own it.  While you may get satisfaction initially, in the long run, expensive vehicles are not worth it.  Buy a cheap car that is reliable for less than $25,000, and invest the rest in an appreciating asset. You will sleep well, and make money.

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