[adi.mariner]

Voted No for buying a New luxury car as my usage doesn't warrant it. Also buying a car on a loan is a big No for me as I am a salaried individual and don't have any perks/set off for taking the same. However well maintained Used Luxury Cars do make a lot of sense as there is someone who has taken the depreciation hit/benefit and is looking to sell them cheap.

[Gansan]

If one has the money, and doesn't have to think twice about the cost of ownership after purchase, then one can go for it. They also signify exclusivity, because not many others outside the club can buy and own them. For a certain class of people, that status matters and they will not be seen in anything less on four wheels. The aristocratic class or rich businessmen. But for a salaried, EMI paying person - however big that salary is - I personally think it is not so good an idea.

I know of a person. Net worth will be not merely crores, but a few thousand crores. He will be the CEO and largest shareholder in company A. He will also own a company B, which will rent cars. Company A wants to lease a top end Audi or Merc or whatever for their CEO and company B buys the car and leases it to them. The lease rent the former pays for the car recovers the cost of the car in the first few years for the latter.

Ideally that is how these cars should be owned and enjoyed!

[th2]

I would vote No. Purely from a VFM point of view, In India the high-end vehicles are heavily taxed. For example, let's consider the Ford Mustang. In the USA with the same 5.0 litre engine it is around 36K USD MSRP (26 lakhs INR). In India it is INR 75 lakhs + road taxes, say approx 100K USD.

Now, if you are a salaried dude, this is coming from your post-tax income. You need to earn around 110 lakhs, pay 35 percent as income tax to the government and then spend the remaining 75 lakhs on a car which an American citizen would pay 26 lakhs for.

In India, these kind of cars make more sense for business folks who can at least claim some depreciation benefits from a taxation point of view.

[NT56]

It is worth buying a premium luxury car for business. The extra money is offset by some amount due to the higher claimed depreciation as business expense and subsequent tax benefits.

Moreover, it also acts as a marketing/promotion tool for many businesses. While it is not a must have but it helps a lot to make an impression of abundance to close certain deals. I know several folks who used to rent luxury cars when receiving business guests 15 years ago. Now they don't have to rent because they own a few.

[andafunda]

My simple thumb rule for any large ticket discretionary purchase - make sure your annual gross income and / or networth is atleast 4x of the value of the purchase.

Luxury brands exist primarily to differentiate rich/wealthy customers from the masses. They are by definition expensive - low turnover, high margin products. You can not jusity VFM with pretty much any luxury brand across any category. This might seem materialistic and there may be rich people who are understated/don't need the ego boost, but by and large people with serious money want to ensure they appear and are treated differently from the masses.

Also, the worth of a certain sum of money is different for each person - an entry level IT employee may think paying 3L for a motorbike is a stretch, while the CEO may buy such a bike for just a weekend and then forget about it.

[adithya.kp]

Interesting perspective. Did you mean net income?. If not, any reason as to why consider gross income?
I think, we should consider net worth instead of income. Because income may stop all of a sudden. Due to business not doing well (for businessmen) or layoff (for salaried)

Originally Posted by andafunda

My simple thumb rule for any large ticket discretionary purchase - make sure your annual gross income and / or networth is atleast 4x of the value of the purchase.

[TrackDay]

It Would depend on my Income I guess.

Yes, It is a pain to maintain and drive in our streets, but once you climb the social ladder along with good financial growth I guess this is part of the game.

If you are a big business person or Celebrity and often have to travel, the journey can be quite pleasant with such plush rides. But If I don't have the money, no I wont buy to impress others. That is plain financial suicide.

[Durango Dude]

Voted NO! With the present rates of taxes (ownership) and service (upkeep) costs, fabulous depreciation: I'd say, I'd put my money else where worthwhile and even those options are shrinking.

[Godzilla]

Are you asking whether it value for money? Otherwise worth/value depends on the purpose and the subject.

I believe it does from a perspective of a social status indicator, luxury cars are more of a statement and used as an object to indicate a person networth or success for the most part. Irrespective of what it costs outside of India anyone in India has to pay similar cash to buy them so it is a level playing field. So IMO it serves that purpose.

I know super rich people who still drive around a Honda city but they are usually outliars.

[andafunda]

Originally Posted by adithya.kp

Interesting perspective. Did you mean net income?. If not, any reason as to why consider gross income?

Because tax rates and incidence may vary. I used the benchmark because post tax, that's what most households aim to save as a percentage of gross income in a year.

[voldemort]

Voted yes, with some caveats.

Buy only if you have a lot of money lying around, not only for the purchase itself, but also for the inevitable endless service costs.

Also, I wouldn't buy a premium luxury car if that'll be my only car.

Premium luxury cars are usually more comfortable over long trips, isolate you from the outside traffic, the seats are better, and they're also supposed to be rather safe.

When it works, it's really nice. However, I also have a constant low-level subconscious fear of 'will this break down on this journey'?

[pk1972]

Voted Yes. I think with the new highways, expressways, it’s totally worth the high-end luxury cars. They are over priced because of the tax / duty structure but if you can afford it without breaking the bank, should definitely buy one.

[DonHyd]

This question arises for a person who has a budget between 30-50 lakhs because this is the segment where multiple options exist from luxury and non luxury brands. For example you could be confused whether to buy a superb/camry for its space/reliability or something like an Audi A4/Q3 for its badge.

But when one's budget is North of 50 lakhs, I don't see any alternative to luxury cars. Are they VFM? May be not. But still you can't replace an E-class/5-series with anything else for luxury/driving pleasure.

So, yes, if money is not an issue, I'll definitely buy a luxury car above 50 lakhs. I also don't mind spending even 10 lakhs more for a 6 cylinder engine vs a 4 cylinder one. Below 50 lakhs however, I'll prefer D2 segment sedans like superb/passat/camry.

[avdhesh15]

It's very subjective as most answers on the forum.

If I ask someone with annual income of 25 lacs the answer would be no. If I ask the same someone with annual income of 250 lacs the answer would be yes.

[aditbelw]

Voted Yes.

The aspirational value associated with luxury brands is huge! After all many of us work hard and slog ourselves out to improve our lifestyle and grow from the current spectrum an individual would be in.

Driving my x5 gives me a sense of success while my other cars reminds me of my humble start.