Buying a luxury car: 6 questions, answered

MANILA, Philippines – Hearing a car enthusiast talk about luxury vehicles is like listening to someone discussing a marriage proposal: they think about all the must-have qualities, they weigh the pros and cons, and they insist that choosing the right car is a deeply personal and instinctive milestone.

We can’t blame them, for the decision to purchase a luxury car is a pretty serious commitment. Sometimes, car-owner relationships do outlive romatic endeavors.

But it’s a love affair that comes with a price.  Right now, luxury cars in the Philippine market easily cost 5x more than an average sedan or SUV.

Cost is the single biggest deterrent that keeps people from taking home the best-in-class car out there. Traditionally, luxury vehicle owners have been perceived as an exclusive club of politicians, CEOs, and high net worth individuals.  But thanks to maturing economy, and more financing opportunities that don’t require paying a premium outright, that scenario is slowly changing.

 The Chamber of Automotive Manufacturers in the Philippines, Inc. (CAMPI) reports that sales of luxury vehicles have registered impressive growth in the first quarter of 2015.  Aside from the well-known Japanese and Italian names, European brands are also arriving to our shores one by one, indicating that there is, indeed, a growing market for top-of-the-line vehicles.

People covet luxury cars for different reasons.  The prestige is a given: these cars look good in the garage and on the road. But aside from that, what else do you really get?

To get answers, we talked with 3 self-proclaimed ‘car-guys’: Jason Dela Cruz and Paolo Subido of Top Gear Philippines, and PGA Cars’ Gian Paolo Brambilla.  We wanted to find out if these so-called luxury cars are now more attainable than ever.  Here’s what they told us.

Are they more affordable now?

“When you say ‘luxury,’ people automatically think it’s expensive,” Jason says. But he adds that luxury is a relative term and that it does not always just refer to the premium brands. Luxury could simply be any car that you happen to want, despite its price. For example, some car models may be more expensive than others, but very attainable under the right circumstances. So the experience of getting any high-end car could be a luxury, too.

That said, even premium-label cars could now be more affordable than you think. “With the very wide model range of luxury European cars being offered in the market and various banks financing and leasing options available, [these cars] being expensive is just a market perception,” Gian says.

Based on terms offered by banks such as BDO, luxury cars with lower price points (between P2.4 to P4 million or around $51,000 to $85,200*) are now easily acquirable through customized financing plans.

How is the handling?

“Luxury car” is really just an umbrella term for a wide range of vehicles: it can be anything from a high-speed sports car to a flagship performance vehicle. According to Gian, all luxury cars successfully combine the following attributes: cutting edge automotive technology, stylish design, and the exclusivity that comes with limited units from a particular model’s cycle.

Luxury cars are also distinguished by the details. Things like massage seats, genuine leather interiors, and fitted TV screens usually come with the package. But more than a well-appointed ride for the passengers, it’s the driver who gets all the fun: a powerful yet efficient engine, advanced on-board navigation, touches like carbon ceramic brakes, and more. All that award-winning engineering makes for a car that just feels really good to drive – even if you’re simply plowing through EDSA on a typical weekday rush hour.

 

Is it safer?

With the exception of high-speed sports cars, luxury cars are, in principle, always safer than anything else on the road right now.

With luxury models, engineers get a bigger budget to play with, so the latest models are always loaded with the newest features. “You usually get more airbags first, better brakes, better driver aids like control,” Paolo says. Traditionally, safety innovations have appeared on luxury cards first before they trickled down to entry-level units. 

However, a car’s safeness is still ultimately dependent on the person who’s behind the wheel. Even a bulletproof car will not protect a reckless driver.  What’s more, big and expensive vehicles are also common target for carjackers (at least here in the Philippines), so you have to be very vigilant and careful at all times.

Are there hidden costs?

Buying a car is one thing; keeping it running is another. Yes, luxury cars will have higher maintenance costs, including insurance premiums. Parts and services can only be provided by authorized dealers and specialists trained by the car brand. Overall, there are more details under the hood that need to be checked and fine-tuned regularly.

However, Gian explains that for a luxury vehicle, service intervals will be farther and fewer compared to other cars. Average cars need tune-ups at least annually; a luxury vehicle can go for two years before it needs a general maintenance check. Its geniune parts, though pricier, will last longer, too. So again, it’s all a matter of perspective about what you pay for.

Can I consider it as an investment?

The moment it exits the dealer, a car’s resale value can go down by 30% or more. Cars depreciate very fast. Considering this, it’s hard to define them as ‘investments’ in the traditional sense. 

But this is not always the case for all luxury vehicles. According to Paolo and Jason, there is a very good market for pre-owned luxury vehicles in the Philippines, expecially for limited-edition models. When a car model reaches collectible status, its value can hold for a long time.

When is the right time to get one?

For Jason, the right time to get the wheels you’ve been coveting is when you decide to get it. If you can’t afford it right now, you check for how long it will be available, explore if its price will go down in the near future, and then you plan out how to fund your purchase. 

Paolo adds: “It really depends upon you: when you can get it, when you want to buy it, [and] of course it all depends on when the car that you want is available.”

These days, luxury car buyers are not just wealthy business owners. Based on BDO’s latest sales data, entrepreneurs and professionals are also a growing segment of the premium car market. They’re usually the ones who have worked for more than 15 years, are at the peak of their careers, with established and highly-profitable businesses, looking for a sense of self-fulfillment, and aspiring for something more.

If things are going well, there’s really no way to go but up. People are entitled to enjoy the best things in life, if they’ve worked hard for it. “You can’t stop the ‘wheels of success’ from rolling,” Paolo says.

Dealers and financial institutions are also lining up to entice you to get that ultimate car right now. “With low interest rates being offered by banks like BDO, the cost of entry in the world of luxury cars is becoming more affordable,” Gian says. “This, combined with exciting new model offerings, as well as attractive promotions by dealers, affirm that it is the best time to get that luxury car and reward yourself for working hard.” – Rappler.com 

Luxury is now withn your reach. Get the car you’ve always wanted. Avail of a BDO Auto Loan now. Click here to get more information.  

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*$1 = P46.90