Many have dreamed of owning a luxury car that turns heads as you drive down the street. There is also a certain level of prestige that comes with owning a luxury branded car. However, purchasing a luxury car as your first car can be a costly mistake, especially if you fall into these four categories. Here is what you need to know.
Is your budget ready to handle additional commas?
By now you probably know that owning a luxury car doesn’t come cheap. If you haven’t budgeted and researched the costs that come with purchasing one you could be already setting yourself up for financial failure.
This also means looking beyond the price tag that sits on the gleaming window of your desired car. Luxury cars have initial and ongoing costs like any other car such as stamp duty, Insurance, fuel, and Luxury Car Tax which is a tax of 33% that is applied on the value of a car that reaches a certain amount. This will differ based on the model and the price range of the car.
According to Budget Direct, the average initial cost for a luxury car such as an Audi Q7, Mercedes-Benz S500e, Porsche Panamera was at $303,366. Fuel cost for luxury costs that were over 15,000km at $502. Without having your budget ready, you could end up paying for your new wheels through the nose.
Your salary bracket hasn’t changed
This may seem like a no brainer, but it is vital that you assess your current financial situation to see if you will be able to afford your new car. This means researching what the full cost of owning a luxury car is and possibly speaking to a financial advisor or broker to see if the car you have in mind will suit your current financial circumstances. A car loan can help you boost your ability to own a luxury car, but it is vital that you use a loan calculator to check if it will be affordable over the term of the loan.
The cost of depreciation
If you are spending close to $100,000 on a luxury vehicle it could be difficult to stomach the blow that comes with depreciation. More so if it is a luxury brand that is not popular on the used market. Depending on the model of your car, colour, speed performance body shape, and age in your car will be at you could lose up to 50% of its value. This means that if you purchase a car for $100,000 in three years' time it would have lost $50,000 in depreciation.
It doesn’t come with parts that are easily available
Buying a car that has never been seen before on Aussie streets could be a head turner, but it can also be a pocket wringer. When it comes to the maintaining and repairing your car you could be faced with huge costs as your car is most likely going to need to be serviced at a specialised mechanic and need unique quality parts. If you have not yet considered this aspect then it’s best to not buy a luxury car as your first car.