Luxury car brands have become increasingly unaffordable for the middle class due to rising vehicle prices, maintenance expenses, and insurance costs. According to Kelley Blue Book’s Average Transaction Prices Report for September 2024, the average transaction price for an entry-level luxury car was $56,408, while the ATP for a high-end luxury car was $117,557, which is 143% more expensive than the ATP for a new vehicle.
Chris Pyle, an auto expert, explains that luxury cars come with special features like a unique paint job, nice wheels, chrome, wood grain, interior and exterior electronics, suspension upgrades, and comfortable seats. These additional features drive up the cost of luxury vehicles, making them unaffordable for many middle-class individuals.
Middle-class households, with incomes ranging from $56,600 to $169,800, are advised to spend no more than 20% of their post-tax monthly income on a car payment. However, with the average monthly car payment for new cars in Q2 2024 at $734, luxury car brands are out of reach for most middle-class families.
Alan Gelfand, owner at German Car Depot, points out that maintenance costs and technological advancements in luxury cars, such as advanced infotainment systems and hybrid powertrains, contribute to their unaffordability for the middle class. Specialized parts and factory-trained experts required for repairs further add to the overall cost of owning a luxury vehicle.
Experts have identified five luxury car brands that are unaffordable for the middle class:
• BMW: $72,122 ATP
• Porsche: $125,894 ATP
• Mercedes: $72,345 ATP
• Audi: $65,690 ATP
• Land Rover: $103,265 ATP
These brands offer luxurious features and advanced technologies that drive up their prices, making them inaccessible to many middle-class consumers. As a result, middle-class individuals are increasingly turning to more affordable car options that better fit their budget and lifestyle.