Luxury Market Drives Holiday Car Sales
In today’s tough economy, the difference between the luxury car industry and the non-luxury one has grown increasingly noticeable. In the non-luxury world, new car sales have dropped and the cost of cheaper used vehicles has risen along with demand. The average car age has risen to 11 years, according to R.L. Polk & Co., a statistic that only further highlights the average person’s financial aversion towards getting a new car.
Trends have remained much more consistent in the luxury market, where the economic downturn has had a minimal impact on sales. For those who are less constrained by financials and who don’t have to worry as much about insurance quotes and maintenance costs, the luxury market remains as appealing as ever. In fact, most high-end dealerships report that business this winter has risen in the range of 5 to 10 percent over last year. While many wealthier Americans have certainly been hit hard by the recession, analysts speculate that people are highly unwilling to downgrade cars once they have experienced a luxury model. Attractive leasing values for high-end cars – due to, in large part, their strong resale values in a vibrant used car market – has further allowed luxury aficionados to drive the vehicle they want without having to make a long term commitment.
For the most part, strong luxury sales do not trickle down into the general market. This holiday season would appear to be an exception, however. During this time of year, luxury dealers offer clearance sales, attractive financing options, and a deluge of television commercials intended to draw wealthier buyers into the store. The rise in holiday sales in recent years has shown this approach to be an effective one.
This winter, non-luxury models have begun to follow this lead. Several manufacturers, most notably Honda, have aired commercials directly criticizing those who overspend on a luxury car for Christmas. These commercials still help repackage a year-end clearance into a holiday season sale. Dealerships, meanwhile, have begun offering those same financing incentives. With car sales surprisingly strong this winter, and with analysts estimating that luxury car shoppers have been increasingly drawn to cheaper models, even the non-luxury industry has shown strong signs of improvement this winter.
With the holiday market driven largely by the sale of high-end models, they may have their luxury counterparts to thank.






