Here's Why Some Used Luxury Cars Are So Cheap
If you've spent any time scrolling through online used car listings or wandering used car dealership and auction lots, you might have noticed a surprising abundance of cars from luxury brands. From Audis and Aston Martins to Rolls Royces and Volvos, these marketplaces are crowded with older luxury cars for sale at prices befitting more basic transportation from mainstream automakers. It's no secret that many new cars depreciate quickly, but how can a model that originally sold for six figures drop below the cost of a new economy car over the course of just a few years? These shocking sale prices are generally a market correction when a luxury car is expensive to drive and maintain due to poor reliability, pricey upkeep, or both. Many luxury cars are loaded with complex and fragile high-tech systems and features that introduce extra failure points and complicate repairs.
It's why Consumer Reports' list of the most expensive car brands to maintain is packed with the likes of Audi, Land Rover, Porsche, and Mercedes-Benz. Resale values change quickly based on supply, demand, and a model's reputation and a particular model's popularity can vary greatly by location based on features like a convertible top or all-wheel drive. Driving, maintaining, and storing a vehicle will also vary in cost based on where you are situated, and regardless of how one's classic luxury car journey begins, years of persistent and expensive repairs can drive owners back to cheaper, less fancy cars with warranty coverage.
Even basic maintenance is likely to be expensive on luxury cars
General upkeep tends to be much more expensive on high-end luxury vehicles, all the way down to basic tasks like fluid and filter changes. These cars often use cutting-edge materials and components that cost more to pull down off a parts shelf. Even without performance goodies like carbon-ceramic brakes, buying parts for a luxury vehicle can wipe out some of that initial savings. For example, a new plastic washer fluid reservoir for a 2013 Mercedes-Benz G550 costs $208 from the dealership. If you drove a Honda Accord from that same year, you could buy a replacement reservoir tank and two new pumps for about the same amount.
If you see a deal on an older luxury car that screams "too good to be true," it might be best to heed that warning and do a thorough investigation before buying anything. While sometimes the superior build quality of these cars can mean a productive life down the road, you might want to shop for an extended warranty to cover the repair costs when those high-tech features go wrong.
Not all luxury cars have terrible resale values
If you're looking for a luxury vehicle that doesn't suffer from abysmal resale values and an awful reputation for reliability, look no farther than Lexus, the luxury division of Toyota. Lexus is known for producing dependable and reliable premium vehicles, and many of them share parts with Toyota's main line of cars so repairs, maintenance, and parts can be cheaper than other luxury brands.
Porsche's sports cars stand out as German cars with high resale values, but more than anything else this is due to their pedigree as exceptional performance vehicles. Both Lexuses and Porsches often rank at the top of lists of vehicles with high resale values, so they are potentially smarter investments. Porsches are known for often having expensive maintenance and repairs, however, so keep that in mind if you're buying a higher-mileage car.
Finding a good aftermarket warranty, or buying a depreciated model that's still covered under its original manufacturer warranty can help mitigate the cost of owning a used luxury car. Keep in mind though, that those warranties don't usually cover normal wear items like brakes and tires, so those will still be big out-of-pocket expenses.
