Best Luxury Car Values Today
From top: Infiniti G35, Cadillac DTS, Lincoln MKZ
While the price of a new luxury car is always going to be higher than the price of a less prestigious car, you may be able to negotiate a better deal—and so get a better value—on the luxury car. Main reason: There’s far less profit margin built into the sticker price of an economy car or a mid-priced car.
Example: The Lincoln Navigator sport-utility vehicle (SUV) is basically a higher-trim/better-equipped version of the Ford Expedition SUV. There may be as much as $10,000 profit for the dealer in the sticker price of such a vehicle—and thus, a great deal more “wiggle room” to negotiate a lower price.
Other factors that make it possible to get a better deal on certain luxury-brand vehicles include…
THE LUXURY PECKING ORDER
Some luxury car brands have to be more aggressive with incentives, such as cash back/rebate offers (either for the dealer or the customer, both ultimately benefiting the customer), special low-rate financing, etc., to lure customers away from competitors. Examples…
• General Motors’ Cadillac division is an excellent case in point. After several years of declining sales and decreasing market share, it has completely revamped its model lineup to more effectively compete with such brands as BMW, Lexus, Audi, etc. Cadillacs are very good cars now. But to get buyers to take a fresh look at its vehicles, Cadillac has had to put very tempting offers on the table—including (at the time of this writing) as much as $5,000 cash back on the XLR retractable hardtop roadster and $4,000 cash back on the full-sized DTS sedan. Special low-rate financing deals are also available. (For more information, visit www.gm.com. Click “Current Offers” under “Shop GM Vehicles.”)
• Ford Motor Company’s Lincoln is another brand that’s currently struggling to rebuild its market position—and is thus offering some great deals on various models, including (at the time of this writing) as much as $7,000 discounts on the full-sized Town Car sedan, special lease deals on the entry-luxury MKZ sedan ($339 per month for 39 months) and up to $3,500 cash back on the Navigator luxury SUV. (For more information about Lincoln’slatest offers, visit www.lincoln.com/shoptools/incentives.asp.)
Flip side: Dealers of brands that are doing well—Lexus, for example—are less likely to be interested in haggling over price.
EXCLUSIVITY
Part of what drives the price of a luxury car (up or down) is its perceived exclusivity.
Example: Models that have just come onto the market (or that have just been substantially updated) will typically have less-negotiable prices. The dealer tells you what you’ll pay—take it or leave it. If you don’t buy, the person behind you probably will. Thus, the sticker price of the just-launched hybrid version of the Lexus LS sedan is not one you’ll be likely to haggle much over.
On the other hand, when a given model has been out for awhile—or there’s a newer/updated version on deck—the “exclusivity factor” wanes and the price suddenly becomes more negotiable.
Example: The Infiniti G35 luxury-sport sedan/coupe has been significantly updated for the 2008 model year—and 2008 models are becoming available at dealerships. However, plenty of brand-new 2007 models are still available, and likely will be into January and February—often at great discounts. You can be sure that the deal on a 2007 G35—a fine car—can be more favorable than the terms you would be able to wrangle on a 2008.
When in the market for a luxury car, it really pays to keep abreast of new model changeovers by reading industry trade publications, such as Automotive News, as well as car enthusiast’s magazines, such as Road & Track and Car & Driver.
Bargain: Some of the best deals you’ll find are on luxury cars (and brands) that are just now trying to establish themselves as “luxurious.”
Example: Hyundai will soon offer a V-8–powered high-end luxury sedan (likely to be unveiled at the January 2008 North American International Auto Show in Detroit). Detailed information is not yet available, but the anticipated price is in the mid-$30,000 range, comparable to (but undercutting) established brands, such as Lexus, Acura and so on. But Hyundai will be forced to offer much better deals to get buyers to take a look—even though its new luxury sedan is likely to be a very credible alternative to the mainline, already-established Japanese luxury car brands.
USED LUXURY CARS
Luxury cars tend to suffer the most depreciation, on average, because their initial prices can be quite inflated. It is not uncommon for a luxury car to lose 20% to 30% of its “sticker price value” during its first year on the road. Thus, great deals are available on slightly used luxury cars—which will still look and drive just like brand-new models and, in most cases, still have the majority of their factory warranties in effect.
• Lexus ES300/ES350 and Lexus LS400/450. As “blue chip” as it gets, these are known for being well built and reliable.
• Buick Lucerne V-8. Well built, handsome and comfortable. Used market prices are good because depreciation has been based on inaccurate notions of American car quality relative to popular Japanese brands.
• Cadillac DTS/Seville. Similar to Buick and the same reason-ing keeps used model prices low.
• Infiniti Q45. This sedan never took off when new, but it offers a smooth ride and powerful engine and is well appointed. Used market prices are good, especially considering what you get.
Bottom Line/Retirement interviewed Eric Peters, automotive columnist, Washington, DC, www.ericpetersautos.com, and author of Automotive Atrocities! The Cars We Love to Hate (MBI).
(Article originally published October 1, 2007)
Reprinted with the permission of:
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