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82% say prestige cars are worth it – discover the reason

5 July 2024

Written by Simon England

|  5 Minutes

Over 200,000 Brits own a luxury car, a number which increases by approximately 9-10% yearly. Despite stagnation in many other markets the luxury car industry has no trouble selling the newest models. An element of prestige comes with owning a premium motor, however, social incentives alone can’t explain why Brits choose to splurge on an expensive sports car in 2024. After-all, 82% of Brits say that their luxury sports car is worth the high price tag.

82% of Brits say that their luxury sports car is worth the high price tag

We asked 228 Brits about their luxury cars and we found some interesting results. This article highlights why Brits buy luxury cars. We also explore how these frivolous motors have become so accessible in the UK via car financing options and approved used car-buying schemes.

Luxury cars are an important cultural icon

the UK has one of the highest densities of luxury cars with a 9% increase in the market in 2022. The British automotive industry has long been associated with meticulous craftsmanship and prestige. During a prosperous economy following WWII Brits became attracted to luxury conveniences and status symbols.

The Bentley, Aston Martin, Rolls Royce, Land Rover (Range Rover), Porsche and McLaren are some of the most iconic British manufacturers. Despite new ownership, these names still uphold the image of English elegance. Owning a nice car displays prestige but also offers great comfort, performance, style, practicality, and security.

Despite economic challenges, the luxury car market grows yearly but what motivates Brits to buy luxury cars? It seems that prestige cars rarely act as just a status symbol. Our recent study (ALA, 2024) shows that only 8% reserve use of their luxury cars for professional or significant events. 75% use their luxury vehicle often and domestically. Prestige cars serve as part of a lifestyle rather than solely for image.

How often do you drive your luxury car

Buying fancy cars on finance

In the early 1900s, cars became more affordable and vehicle ownership was extremely desirable. Around the same time, car finance made its appearance as an alternative way to pay for a new car. A significant downpayment and short repayment terms make owning a car more accessible.

More than 2.2 million Brits (approximately 6.5%) use car finance in 2022 and economic strain is contributing to record numbers of financed cars yearly. However, buying beyond your means is all too easy with buy now pay later arrangements.

Another problem with financed cars is that if it’s stolen or written off, your market value car insurance settlement may not cover your outstanding loan balance so you could be paying off a vehicle you no longer own. Instead, use GAP insurance to cover your shortfall. GAP insurance tops up your insurance settlement and covers up to the original value of the car, or the outstanding finance balance if this is higher (Back to Invoice GAP). Regardless of your financial situation, you won’t be paying for a car you no longer own and the remainder of your GAP insurance settlement can go towards a downpayment on your next vehicle.

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Car finance could explain the interest in luxury cars in the UK? However, according to our research, only 21% used car finance or a personal loan option to buy their high-end vehicle. 3% used car leasing but the majority (74%) paid in cash. This result suggests that prestige motors make up part of a luxurious lifestyle. However, Brits are more likely to finance a premium car compared to a regular car.

(74%) paid in cash

How do Britons afford luxury cars?

With most luxury car buyers paying in cash for their cars, it makes sense that more affluent groups buy premium vehicles. However, an increasing number of lower-income groups also drive these types of cars.

The reason premium cars are so accessible is by buying second-hand. 63% bought an approved-used (33%) or a second-hand luxury car. Only 28% bought brand-new. Cars depreciate steeply during the first years of ownership so you could lose a significant portion of your investment by choosing a new car. Brand-new car leasing is one way that dealerships can absorb the initial depreciation. A used car may function perfectly but comes at a fraction of the original price making it much more affordable.

(33%) bought a  second-hand luxury car

If you’ve bought a high-end luxury car and don’t want to risk losing out to depreciation in case of theft or a write-off, consider GAP insurance for new cars. Guaranteed Asset Protection insurance tops up your car insurance settlement to cover the shortfall left by depreciation, car finance or other factors.

Even if you didn’t buy your vehicle new, the benefits of GAP insurance still apply if you bought from a VAT-registered dealer. 12% said they bought from a private seller, if this is you, you can still cover your vehicle’s depreciation with Agreed Value GAP insurance.

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Why do we really buy luxury cars?

We’ve explored some interesting details suggesting that prestige cars are used for everyday activities as part of a luxurious lifestyle. However, more people buy luxury cars on financee which could imply an illogical motivation behind the decision.

We asked Brits why they buy luxury cars; they said that comfort and performance were the top considerations. Visual appeal was the third-most important factor with, practicality, security and prestige taking, 4th, 5th and 6th places, respectively.

We asked Brits why they buy luxury cars

Buying a car for aesthetics or prestige could have social motivations. However, more often than not, these timelessly stylish cars are simply a joy to behold – the driving experience is unmatched in non-luxury cars. Regardless of your incentives, 82% consider their luxury car to be worth it.

Frequently Asked Questions

Are old luxury cars worth it?

It depends on your priorities and preferences. If you like the appeal of classic cars and don’t prioritise the performance and comfort advantages associated with more modern models then an old car is ideal and often very affordable. However, old luxury probably aren’t worth because the comfort performance and modern features make the car worth the cost for most people. Finally, running costs and insurance on an old luxury car will be high and it may not be worthwhile.

Are luxury cars more expensive to insure?

Generally, yes luxury cars cost more to insure because they would cost more to repair or replace if something happened. Moreover, some luxury cars are targets for thieves such as the Mercedes C-Class or the BMW 3 Series. However, some luxury cars are cheaper to insure such as the BMW 2 Series (group 20), Mercedes-Benz CLA (group 24), Audi A3 Cabriolet (group 18), Jaguar E-PACE (group 24), Lexus CT (group 17).

What classifies a luxury car?

Although it can be subjective, a luxury car manufacturer usually has a prestigious reputation. They combine performance, comfort and the highest-quality materials and features to deliver the ultimate driving experience. Some entry-level luxury brands can be more affordable to buy and run but still offer excellent features. These mid-luxury brands include Lexus, MINI Cooper, VW, Volvo and DS Automobiles.

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