Affordable Luxury Vehicles: no longer a distant fantasy
That luxury vehicle you dreamed of all your life may no longer be a dream, but a reality. Luxury automakers seem to be shifting towards a broader client base, no longer only catering to the upper class. According to a study by Lightspeed/Mintel, 24% of drivers say affordability is the most important deciding factor when purchasing a vehicle, followed by advanced safety features and driving performance. But these vehicles are not keeping their high-end equipment without some cost.
Of course, the high-end equipment luxury vehicles come with does incur some costs. Some examples of entry level luxury vehicles are:
Audi A3 32800 Q3 34600
Acura ILX 29590 RDX 42190
Mercedes-Benz CLA 35300 GLC 45150
BMW 3 Series 39900 X1 38880
Manufactures such as Audi, Acura, Mercedes-Benz and BMW have mid-size sedans starting as low as $29,590 for the Acura ILX and SUV’s starting at $34,600 for the Audi Q3. These prices are clearly higher than entry level vehicles from domestic/import manufactures but they are significantly lower than the entry prices of the past. Not stopping there, luxury automakers are offering comparable finance and lease rates, Acura for example is offering a 0.9% lease rate over 36 months on their 2017 RDX’s.
With higher payments, it’s no surprise that debt has increased. In the December 2015 Financial System Report, compiled by the Bank of Canada, it states that 8% of Canadians’ debt exceeds 350% of their annual disposable income; the percentage of Canadians with this amount of debt was a mere 4% in previous years. However, with a decrease in entry-level auto prices, it could be reasonable to anticipate a drop in Canadian debt. 65% of Canadians say they would consider a luxury vehicle, even though only 39% believe luxury vehicles are worth the price.
When you dissect the data, 69% of men aged 18-44 would consider a luxury brand and 76% of Chinese Canadians would lean towards a high end brand. Brands such as Jaguar are capitalizing on this data and gearing vehicles towards these demographics. Specifically, the “New Generation of Jaguar” campaign promoted the new F-Pace compact SUV which was aimed at the 18-44 male demographic. Despite the MSRP starting around $50,000, it comes comparably equipped to equivalent domestic/import SUV’s around that price. The data also shows that women make up 42% of engagement on luxury brands and that 60% of women plan on purchasing a new vehicle within the next three years.
It’s great to see luxury manufacturers creating entry-level models and offering incentives for those who didn’t think a luxury vehicle was within reach. Perhaps in the future, marketing teams will acknowledge women as an active consumer base and shift their marketing tactics toward all genders.
What do you think – would you consider a luxury vehicle at their entry-level pricing?