Bill Gates drives a Porsche. Jennifer Lopez drives an Aston Martin. Your grandfather might have driven a Cadillac back in the 60s. The car you drive can say a lot about you, and luxury cars have held appeal for decades. But when did it all start, and why do luxury cars still hold so much appeal today for many people?
The history of luxury cars in the United States
In the beginning of the car's history, you could say that all cars were luxury items. Cars were expensive and inaccessible for most people until Henry Ford began the assembly line in 1913, revolutionizing the automobile industry. With Ford's system, prices were cut, production was boosted, and cars stopped being inherently luxurious.
While Ford's Model T became more affordable at $440 in 1915 (when the average income was $687 a year), more expensive cars were still being made. The most popular luxury car brand at that time was Packard, who exported more cars than any other in its price class in the 1920s. With their iconic slogan "Ask the Man Who Owns One," Packard cars represented the American dream of automobiles.
After World War 2, the luxury car market changed. Gone were custom coach built cars and most luxury cars became mass-produced and factory-finished. Cadillac in particular emerged as a powerful player in the market, dwarfing sales of other brands like Lincoln and Imperial.
Until the 1950s, European cars in the United States were rare and reserved for the very rich. Over the decades, BMW, Mercedes-Benz, and Audi emerged on the U.S. scene as luxury players. Today, foreign cars have the majority share in the luxury market.
Current popular luxury car brands include BMW, Lexus, Mercedes-Benz, Audi, Tesla, Ferrari, Lamborghini, and Porsche. In 2020 BMW, Lexus, and Mercedes Benz led the U.S. luxury market in sales.
What people love about luxury cars
Luxury cars go beyond the basics, and it's cliche but true: you know them when you see them.
Typically, luxury cars use higher-quality interior finishing materials, features that lower-priced models don't such as sound systems and safety features, more amenities, and high-quality body parts. Sometimes luxury cars have warranties that are longer than those for the same manufacturer's non-luxury brands.
Whether luxury cars are defined by exclusivity, performance, or price is up for debate. Senior Contributor of Forbes Pamela N. Danziger writes that luxury brand values include craftsmanship, superior performance, exclusivity, innovation, sense of place and time, sophistication and design aesthetic, creative expression, relevance, heritage, and responsibility.
Luxury cars are designed for driving comfort and pleasure, whether you're interested in speeding down the highway or having a pleasurable commute to work. Luxury car owners love the style, power, and advanced technology that come with these cars.
"I love working on luxury cars because typically the people who own them are educated about them, understand the process of their vehicle being in an accident, and understand certain things are required to make the car in pre-accident conditions," Rich Little, owner of auto repair shop Bel-Red Auto Rebuild that specializes in collision repair of luxury vehicles, says.
Luxury car market trends
In 2020, the global luxury car market was valued at around $410 billion. It's projected to grow to $566 billion in 2026, driven by increasing consumer disposable incomes, a rise in tangible luxury elements to vehicles, shifting consumer preferences to SUVs from sedans, and new launches of electric vehicles by major luxury brands.
The 2021 Luxury Car Market Report predicts that with growing environmental concerns and government incentives and subsidies to owners of electric vehicles, the demand for luxury electric vehicles will continue to grow over the next few years. They expect North America to lead luxury electric vehicle sales, thanks to higher disposable incomes and more availability of infrastructure for electric vehicles. Additionally, they expect that the increased focus of luxury car component manufacturers on the development of smart technologies like personal voice assistance and self-driving will also increase luxury electric vehicle demand and sales.
In short: luxury cars provide the style, advanced technology, and power that people have always desired, and that desire is expected to continue to fuel this growing market.
Luxury car features
Common luxury car features include top safety features like auto lane keeping, blind spot warning systems, and curtain airbags; entertainment technology such as bluetooth connections, wireless charging and TV screens; operating technology like remote starters and rain-sensing windshield wipers; comfort features including heated seats and steering wheels, massage functionality, and even cooled seating for summertime; and high resale value.
But some luxury cars take things to the next level. You can get your Rolls Royce with a champagne chiller and crystal flutes, your Aston Martin with a Transponder watch that lets you remotely control your car, your Cadillac with a seat massager, your Rolls Royce with a constellation starlit roof, or your Bentley with a $160,000 mechanical Breitling clock in the dashboard. Some cars include real hand-sewn hide interiors, custom interior trim, power closing doors and even a folding picnic table setup.
Getting luxury cars fixed
When you get in an accident with a luxury car, you can't just take it anywhere. In fact, that's one of the major complaints about these kinds of cars. So how do you decide where to take your BMW or Lamborghini for repair after a collision?
It's important to visit a repair shop that specializes in luxury vehicles. These shops will have the knowledge, technical training, technology, parts, tools, and perhaps even professional associations to handle your car properly. Some luxury cars, like Aston Martin and Lamborghini, have special certifications that auto technicians can complete to know exactly how to fix these unique cars.
You especially want to avoid insurance-driven repair shops, "because your insurance company doesn't care about anything but trying to repair things as cheap as possible," Little says. "You assume insurance companies are working in your best interest, but they're not."
When you take your car to an insurance-driven repair shop, Little explains, you lose complete control of your vehicle. They get to decide how your vehicle will be repaired and what types of parts are used. They'll do whatever meets their needs -- not necessarily yours.
"A lot of people don't understand that," he says. "Cars can be compromised with poor repair, and then you can't resell the car properly." Of course, when you own a luxury car, maintaining the resale value as well as the car's performance and original appearance is a key consideration.
But at Bel-Red Auto Rebuild, Little and his team work for the customers -- not the insurance companies -- and they know what they're doing with luxury cars.
"We have 4-5 million dollars of exotic cars at any given time in the shop. We do some pretty crazy repairs on some pretty crazy cars," Little says.
What's different about repairing luxury cars?
Shops need access to less available factory parts to ensure they maintain the high quality of the car after the repair, and they need to use high-quality materials all around, like the Glasurit paint Bel-Red Auto Rebuild uses. Some luxury cars are also made of special materials, like aluminum or carbon fiber, that aren't widely available.
Outside of collisions, each type of car is prone to specific problems. For luxury cars, problems tend to crop up with the electronic systems, engine misfires, and clutches and brakes. When you go to an auto repair shop that's used to working with luxury cars, they'll be able to easily diagnose and fix these common issues.
Your average car is diagnosed with an OBD2 diagnostic system, but most luxury vehicles require a different diagnostic system to understand the issues with your car. A mechanic who specializes in luxury car repair will have the right diagnostic system for your vehicle.
"The people that own [these cars] care," Little says. "And so do we. We have to take more pride in putting the vehicles together and making sure that they're perfect. We pay higher wages to employees to make sure our employees who are doing these things are well-compensated."
If there's one thing Little wants luxury car owners to know, it's this -- "We're going to go the extra mile to make sure their car is exactly how they want it. If there's a problem, we're going to fix it."