The Real Cost of Owning a Luxury Car Over 10 Years

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Far be it from anyone to say what type of car you can and cannot drive. However, many prospective luxury car buyers often lose sight of significant expenses beyond the initial purchase price and premium fuel.

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The real cost of owning a luxury car includes things like depreciation, insurance, maintenance and repair costs and other factors contributing to the total ownership cost. Before purchasing a luxury car, it’s important to consider all these aspects and ensure that the long-term financial commitment aligns with your budget and financial goals.

Balancing the desire for indulgence with practical financial considerations over the life of your vehicle is crucial for making an informed decision. With that in mind, here are some things to consider before sinking a lot of your hard-earned money into elite vehicles over the next 10 years.

The Real Cost of Owning a Luxury Car Over the Years 

While new cars are slowly decreasing in price — down 5.4% from Dec. 2022 and 1.0% from Mar. 2023 — the average transaction price (ATP) was still an expensive $47,218 in March. That’s 15.5% more than the average transaction price in Mar. 2021.

The luxury ATP in March was $62,067, a decrease from the previous month. However, consumers are now facing another problem tied to price. There are significantly more luxury cars on the market now than cheaper models as automakers continue to focus their production on large SUVs and luxury models.

It’s easy to say that the luxury market is booming when there are significantly more vehicles with ATPs above $75,000 then below $25,000 out of the roughly 275 vehicles on the market. In March 30, models had ATPs of over $100,000, while only two were selling for under $20,000, as automakers focused on size and luxury (and greater profits).

Depreciation

There’s a good chance you’ll be able to gain some money back on your luxury car when the time comes to resell it. According to CarEdge, after seven years, the top five luxury brands — Tesla, Lexus, Acura, Porsche and Audi — have resale values above 60%. But they still fall well below popular models like Subaru, Toyota and Volkswagen, which have seven-year resale values of 78.7%, 77.6% and 77.5, respectively.

However, depreciation in unavoidable, and expensive cars typically depreciate more than non-luxury vehicles during the first five years of ownership due to their steep initial costs. According to iSeeCars, luxury SUVs and sedans are among the worst at holding value and luxury cars, in general, lose an average of 48.1% in value over five years).

With the exception of Porsches (the site found the 911 coupe and 718 Cayman depreciate the least among all models), brands like BMWs, Cadillacs and Audis have high 5-year depreciation averages. Maserati’s Quattroporte, Ghibli and Levante average five year depreciation of 64.5%, 61.3% and 57.8%.

Insurance Premiums

Insurance companies base your car insurance rates on the risk you represent, as well as your car’s age, make, and model, which optional coverages you pick and how much you’re willing to pay towards any claims. Insurance is substantially more expensive for luxury and sports cars due to high-end safety and performance features, ritzy interiors, advanced tech and the higher cost of repairs and replacement parts.

According to Alchemy’s Exoshield blog, you can expect to pay up to three times more in insurance for a luxury vehicle than your average sedan due to repair costs and the constant risk of theft. Over a decade, you’ll be paying a princely sum to drive a vehicle depreciating faster than a popular, less expensive model.

Additionally, you might need to get special insurance, like guaranteed asset protection (GAP) insurance for a luxury car. Standard auto insurance only pays an amount up to the value of your vehicle, so GAP insurance is an add-on intended to cover the difference between the amount you owe on your auto loan and the amount the insurance company pays if your car is stolen or totaled.

Repair and Maintenance Costs

And then there are also repair costs, which — if you own a luxury ride — can be excessively costly due to expensive or hard-to-find parts and the specialization required to install them. Additionally, routine maintenance, such as oil changes, brake pads and tire rotations is more costly for rich rides.

According to CarEdge, the industry average for maintenance and repair costs for luxury vehicles is $10,031 over 10 years. However, costs can skyrocket way above that if you drive any high-performance sports car, European premium brand, high-end SUV, EV or even a big-ticket American truck.

Of the 13 luxury auto brands that CarEdge analyzed, Porsches were found to be the most expensive to maintain and repair over a 10-year period, averaging a whopping $22,075 and over $12,000 more than the industry average.

There is a 51.2% chance that a Porsche will need a major repair (anything that exceeds $500, including parts and labor), which is 16.1% worse than comparable luxury vehicles. Rounding out the top five most expensive luxury brands to maintain were BMW ($19,312 over 10 years), Land Rover ($18,569), Jaguar ($17,636) and Mercedes-Benz ($15,986).

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