Do high income earners buy high priced luxury cars?

Here is some interesting data on the subject of luxury goods...

Most luxury consumers buy cheaper goods

Just because U.S. households with incomes of $150,000 or more have been dubbed luxury consumers, doesn`t mean the consumers buy luxury items.

"So much attention has been given to the `trading up` phenomenon -- people with upper-middle incomes of $50,000 to $75,000 stretching to luxury -- that the converse trend toward `trading down` has been largely ignored," says Pam Danziger, president of Unity Marketing and author of "Let Them Eat Cake: Marketing Luxury to the Masses -- as Well as the Classes."

"`Trading down` is where the affluent consumer with means to buy just about any luxury they want at full price, opts instead to select a less luxurious, but more affordable substitute for the `real thing.`"

Luxury consumers, the top 5 percent of households based upon an income of $150,000 or more a year, are cautious with their money and are strongly motivated to get maximum value for the money they spend, Danziger says.

Only 15 percent of the luxury consumers are highly indulgent buyers, who always or almost always go first class, according to Unity Marketing research.

Source: UPI

Osprey1 - 6/3/2005 10:51:00 AM

+1 Boost

I guess that I am one of the people this article is talking about. I am President of my own Corporation and make a very good living. I own a beautiful home that is hidden away on a large piece of land that few people ever see. I am second generation wealth and like most second generation wealth, got passed the "look at me" thing long ago. I have not purchased a new shirt in nearly two years, I buy my everyday shoes at Wal Mart, my trousers at Old Navy in the "Sale" section for around $12.00 a pair. My one weakness is a good car. I refuse to drive a Mercedes or BMW becuase I spent some of my early years in the music business and lived in Hollywood and saw so many people who were living in their Mercedes and BMW's, trying so hard to impress people. They did not have a thing but those car's and their hair was right. Made me sick. Everytime I see someone in a new Mercedes or BMW I look at them and wonder..... They are good cars but they are "look at me" cars and I want no part of it. I have a new M45 on order that will be here in about a month. Few people even know what it is and that is the way I want it. I am buying the car because I love the feel of being shoved back in my seat when I hit the accelerator. I love the handling, the dynamics, and knowing that not every one in town will have one. Also, when I go to the city I will honk and wave at other M45's becuase I will have a good idea that they are a lot like me. They could afford the Merecedes or BMW but they are probably a little more mature and wear their wealth like a pair of old comfortable shoes.

Osprey1 - 6/4/2005 11:43:52 AM

+1 Boost

Another reason I ordered the M45 was its value relative to the other super sedans. It is the best car available for the money. I agree with much of what you said. There is an old saying that "A rich man's son will never be a rich man's father." 001Buster sort of hit on that. In so many cases it is true. While I grew up wealthy, I was taught to work and to accept responsibility. I took the wealth I inherited and started my own business, totally unrealted to my families and made it a success because I knew the value of a dollar and how to keep it. I was taught that you should have what you need but need what you have. Since I still love to get my hands dirty every day Wal Mart shoes and inexpensive trousers make sense as it would be a little wasteful to destroy expensive clothes at the rate I destroy the inexpensive ones. I do have a few nice clothes for weddings and funerals, which are pretty much the same thing, as you are dead either way. The food tends to be better at funerals however and you don't have to buy a gift to get it. I enjoy trying to get the most out of every dollar I spend, whether it is a pair of shoes or a car. With the M45 I feel like I am getting the car that best suits my needs for the money I am spending. Graphite leather that doesn't show the dirt, incredible performance and styling that doesn't scream "look at me". I take very good care of everything I have, again because it is cheaper in the end to do so.