When shopping for a new car, most people don’t consider a used luxury vehicle. However, it’s a great option for those who want a premium car driving experience without the price tag that comes with a brand-new vehicle.
According to Grand View Research, the global luxury car market was valued at $617.36 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 6.9% from 2023 to 2030. The pre-owned luxury car market is expected to grow even faster at a 22% CAGR from 2022 to 2030.
Clearly, the market for pre-owned luxury cars is thriving. But are they a good investment? Read on to find out!
Pros of a used luxury car
Let’s start with the benefits of purchasing a used luxury car:
Higher quality. A luxury car is a vehicle that provides superior levels of comfort, features, and equipment. For example, they often include leather seats, heated steering wheels, and premium suspensions. They also tend to have more powerful engines. Overall, luxury cars are built for comfort and durability.
Better care. If you’re willing to spend a premium on a luxury car, you’re likely going to take good care of it. Consequently, luxury cars tend to have above-average maintenance histories. Though you should always get a vehicle history report and professional inspection before buying, you can expect luxury cars to have been well-maintained.
Less depreciation. On average, a new car loses 11% of its value the moment you drive it off the lot, 20% after the first year, and 60% after five years! This is why many buy used instead of new—they want to avoid the years when a car depreciates the fastest.
According to Tiger Okeley at Oak Motors, “For certain luxury cars, the initial depreciation is high. However, after five years, the same car can end up being a relative bargain since most of the depreciation has already occurred. The initial purchaser’s loss can become the second owner’s gain.”
Certified pre-owned (CPO) options. Some used luxury cars are certified pre-owned vehicles. This means they have been inspected, refurbished, and certified by the manufacturer or an authorized dealership. Most also include extended warranties. Of course, getting a CPO will cost more than a non-certified vehicle. However, the extra reliability may be well worth the cost.
Cons of a used luxury car
Used luxury cars also come with some potential downsides:
Higher maintenance costs. The mere fact that a used luxury car has had previous owners means it’ll have more wear and tear than a brand-new one. Even if it comes in good condition, it’ll come with higher mileage, which increases the risk of maintenance issues later on. Furthermore, a used luxury car may be approaching major service mileage, meaning you’d pay more for maintenance than you would otherwise.
Costly repairs. The higher-quality parts of a luxury vehicle cost more to replace. So repair work will be expensive and may require specialized tools and equipment that not every mechanic has.
Lower fuel efficiency. Due to their heavier frames and powerful engines, luxury cars tend to eat more gas than non-luxury cars. Consequently, your fuel economy will suffer.
Outdated technology. Any used car may not be equipped with the newest technology. This may not be a deal breaker, but if you want the latest car tech, a used luxury car may not be the right choice.
Limited options. The used luxury car market is smaller than the non-luxury car market. As a result, you will have a smaller selection of cars to choose from and may need more time and patience to find the right one.
The final verdict
At the end of the day, a used luxury car can definitely be worth it—especially compared to a new luxury car. It all depends on your personal preferences, though. Carefully weigh the pros and cons to decide if a used luxury car is worth it to you.