Want to know why Mercedes, Audi, Lexus and all of the other luxury players are doing so well these days? Because of less-costly, lower-end luxury models.
The low-end models, whose starting base prices are between $31,000 and $35,000, are pulling in new customers who desire the status a given badge conveys, USA Today reports. Edmunds.com senior analyst Jessica Caldwell explains:
Luxury sales have increased as products have become affordable to a wider audience. Of late, luxury car brands have focused on the lower end of the price spectrum, introducing models such as the Lexus NX, Mercedes-Benz GLA, BMW X1 and Porsche Macan, which are slotted below existing popular SUVs on the price spectrum.
Caldwell adds leasing is also helping bolster the luxury brands’ high status, as most of their offerings are leased. Those who’d rather own their low-end luxury ride opt for long-term financing with low interest rates, with payments spread out over several years.
The brands’ consumer base is also varied. Kelley Blue Book analyst Akshay Anand said buyers were coming from every corner, “especially as Millennials start to create more wealth for themselves and continue to be as aspirational as ever,” helped by an improving economy.