With the global economy ramping up, many people are in the position to purchase their first luxury car. In fact, the luxury vehicle market is projected to grow by nearly 12 percent over the next four years.
Luxury vehicles are defined as the flagship model from each manufacturer. Some examples of luxury automakers are BMW, Daimler, and Audi.
Other automakers like Toyota and Nissan are also entering this market. All luxury manufacturers integrate the latest technological updates into their flagship models.
It is essentially a race amongst competitors to provide consumers with the freshest tech. Read on to learn more about shopping in the luxury market. Here you will explore 5 tips for buying your first luxury car.
1. Can You Afford Your First Luxury Car?
This is the first question you need to ask yourself before entering the luxury car market. The introductory threshold for luxury cars is $35,000 and more.
Paying in cash is always the best option, but only a select few are capable of this. Most people seek out financing from the dealership to pay for the car. This means you will be making a monthly payment of principal and interest.
A good rule of thumb is to budget 20 percent or less of your take-home pay for automobiles. This means that if you bring home EUR2500 per month, your vehicle payments should not exceed EUR500 per month.
2. Greater Resale Value
One of the most significant advantages of purchasing a luxury car is the resale value. In most cases, the vehicle’s resale value plummets the minute you drive off the dealership’s lot.
Fortunately for you, this is not the case for luxury vehicles. After 3 years, the resale value for luxury cars is up to 58 percent. This is equity that can be reinvested on your next luxury car purchase.
3. Consider the Maintenance and Repair Costs
For many first-time luxury car owners, the high maintenance and repair costs come as a complete shock. In general, parts on luxury cars are more expensive than economy vehicles like Honda Civics.
This is because there are less luxury cars on the road. Therefore, there is less economies of scale on the repair parts.
You can alleviate some of the high maintenance and repair costs by finding a reliable mechanic. For example, there are good repair centers that perform the MOT test in Stoke-on-Trent.
4. High Insurance Costs
Because the elevated resale value and cost of repair parts, insurance is also more expensive. This is another cost that you need to factor into your monthly budget.
The more expensive the luxury vehicle, the most expensive insurance is to carry. It is wise to shop around for insurance quotes before you purchase the vehicle.
5. Fuel
Before purchasing a vehicle, do some research on the type of fuel the car takes. Some luxury vehicles require a premium fuel type.
This will drive up your monthly costs as well. Premium fuel is more expensive than regular by a considerable percentage.
Wrapping It Up
With these tips in hand, you are ready to purchase your first luxury car. Before signing on the dotted line, keep in mind the added cost of things like fuel and insurance.
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