Last month, sales of the Mercedes-Benz S-Class (MSRP: $90,000 to $202,000) were up almost 12% from November 2008. That's unusual: Overall, the luxury segment was down 8% year-over-year, and is down 27% for the year to date.
It turns out that while it's tough to sell top-end luxury cars in a time of high unemployment and an uncertain economy, there are exceptions to the rule. Buyers will still flock to special cars with a lot of cachet and the price tags to match.
Audi, in particular, is faring better than most brands in the segment. With top-sellers like the Q5 SUV and A4 sedan, the company is down a relatively benign 7.9% for the year to date. (Competitors BMW and Mercedes were down 24% and 17%, respectively.)
But the Ingolstadt, Germany-based brand is not all everyday-driver cars and soccer-mom SUVs. Its $146,000 Audi R8 5.2 coupe sports a 525-horsepower V10 engine that gets to 60 miles per hour in 3.7 seconds. Its non-fixed costs (fuel, maintenance, depreciation) are apt for the high sticker price.
There are plenty of other 2010 cars--such as BMW's $137,000 7-Series turbocharged V12 sedan and Jaguar's $115,000 XJ Super V8 sedan--that offer a lot of extras with an MSRP and long-term costs to match. They're at home on our list of the most expensive cars of 2010.
Behind the Numbers To determine our list, we used data from Vincentric, an auto-industry analysis firm in Bloomfield Hills, Mich., to evaluate the following costs over a five-year term: manufacturer suggested retail price, projected depreciation, fuel costs, repairs, interest, opportunity costs, fees and taxes, insurance and maintenance. The data assume an annual rate of 15,000 miles driven per vehicle and a price of $2.60 for regular fuel, $2.86 for premium and $2.75 for diesel. It also applies an inflation rate for fuel prices, since the calculations predict costs over five years. The 10 cars with the highest totals made our list.
We did not evaluate models from exotic brands like Lamborghini and Ferrari, automakers with extremely low production levels, like Spyker and Koenigsegg, or models from ultra-luxe automakers like Bentley, Maybach and Rolls-Royce.
It's not the sticker price but the depreciation that's the key factor in making these vehicles expensive. Dave Freed, a managing partner at Vincentric, says car buyers wanting an affordable vehicle should remember to take into account the value of their asset at the end of five years, not just its initial MSRP.
The supercharged Land Rover Range Rover, for instance, costs $94,275 at the dealer but loses $54,600 in value over five years. That's proportionately more than other SUVs in its class, like the $85,400 BMW X5M (it loses $42,149) and the $82,850 Mercedes-Benz GL550 (it loses $43,142).
New vehicles depreciate at an average rate of $3,461 per year ($4,551 per year for large sedans), according to AAA's 2009 Driving Costs Report. On average, the cars on our list are projected to lose more than $15,000 in value per year.
But it's also true that, in general, cars with low MSRPs cost less over time than their expensive counterparts--they have less value to insure, tax or depreciate in the first place.
Not about Affordability Bill Gacioch isn't thinking about the estimated $92,700 he's losing to deprecation when he drives his red 2009 Audi R8. The Florida real estate investor values the car for its extraordinary performance, not for whether or not it's affordable.
He should know--he also drives a 2005 Spyker C8 Laviolette. Interestingly enough, the Spyker has the same soundness he's come to appreciate in other Audi-built vehicles like the R8, meaning he isn't constantly writing checks to keep the car in working order.
"One of the nicest things about the Laviolette is that its drivetrain is all Audi, which has great reliability," Gacioch says. "Sometimes 'sports car' and 'reliability' don't go together. This does."
At a base price around $210,000, the least it should be is reliable. And anyone who can splash out for such a sticker price needn't worry about affording the depreciation.
Content Courtesy: Forbes
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