Rising vehicle prices, maintenance expenses and insurance costs have put some car models out of reach for the middle class, particularly those from luxury brands.
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But not every luxury brand is unaffordable for the middle class. If you’re in the market for a high-end vehicle, here’s what you need to know.
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According to Kelley Blue Book’s Average Transaction Prices Report for September 2024, the average transaction price (ATP) for an entry-level luxury car was $56,408, but the ATP for a high-end luxury car was $117,557. This was 143% more expensive than the ATP for a new vehicle ($48,397).
Luxury prices vary depending on the brand, model and features, as explained by Chris Pyle, auto expert and virtual mechanic at JustAnswer.
“Luxury usually equates to a special paint job, nice wheels, chrome, wood grain, all the interior/exterior electronics, suspension upgrades, and nice seats,” Pyle said.
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A Pew Research Center analysis of the most recent available government data found that 52% of U.S. adults lived in middle-income households in 2022. Those with middle income — an income that is two-thirds to double the U.S. median household income — had incomes ranging from $56,600 to $169,800.
Experts recommend spending no more than 20% of post-tax monthly income on a car payment, which averaged to $734 per month for new cars in Q2 2024, according to Experian.
“The middle class normally goes for the cars in the $20,000 to 80,000 range,” according to Pyle. “So, that rules out the extravagant luxury cars.”
The two main factors that have pushed some car brands out of reach are maintenance costs and tech advancements, explained Alan Gelfand, owner at German Car Depot in Hollywood, Florida.
Gelfand wrote that brands like BMW and Porsche have advanced infotainment systems and hybrid powertrains, which drive up the initial cost of ownership. It’s not just the car’s sticker price that make it unaffordable.
“Maintenance expenses for these brands are also part of the issue,” Gelfand wrote. “Specialized parts are needed for proper servicing and factory-trained experts are required to perform the repairs.”
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