Prices of Used Luxury Cars Set to Drop?

June 19th, 2012

2013 Lexus GS

Buying a new Lexus has always meant two things:

  1. You get a trouble-free, comfortable vehicle that will last as long as you want to keep it.
  2. When the time comes to sell, you know your car has kept some value and will command a nice resale price.

Those times may be coming to end, though, thanks to the good people over at BMW and Mercedes-Benz.

The drive to be number 1 is powerful. So powerful, in fact, that automakers often go to great lengths to capture the title of “Number 1 Best Seller,” in whatever category they choose to dominate. Volkswagen, for example, wants to be the number one automaker in the world, so part of its strategy to get there is to buy as many car brands as it can. We’ll see how that pans out.

Lexus, BMW and Mercedes-Benz each want to lay claim to the title of best selling luxury brand in America. Getting there obviously means selling more cars than the competition. One way to boost sales is to offer lower prices, or, in the car biz, to create financial incentives for buyers of certain models.

Heavy incentives haven’t infiltrated the luxury class like they have other categories, mostly because the people who buy luxury cars buy for the perceived brand value—they don’t make decisions based on saving a thousand bucks. Times may be changing, though, as Lexus boosted discounts on its cars by 54 percent this year and its SUVs by 60 percent.

According to Automotive News,

Lexus was the top-selling luxury-auto brand in the United States for 11 years, until BMW took the crown last year. Mercedes leads BMW by fewer than 2,000 vehicles through May and Lexus by more than 18,000.

It’s pretty clear that Lexus won’t take the title this year, which is a slap in the face after owning the category for over a decade. Incentives may work to increase sales, at least temporarily, but ultimately they will only hurt the brand by bringing lower resale values for loyal owners. That could be good for people searching the CarGurus used listings for a quality used Lexus, but might send the original owners into the arms of a waiting BMW.

You’re buying a new luxury car. Do you chose Lexus, BMW, Mercedes-Benz or another brand?

-tgriffith

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  1. Jim Redd
    | #1

    I’d go with BMW, simply because I appreciate how they drive. Lexus is comfortable, but not engaging.

  2. Randy
    | #2

    I’m with Jim, I lean towards the Germans but I do like Jaguar now that Ford has no longer pollutes the brand.

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