Friday, October 09, 2009

a question of luxe

These pleasant days, I've been eating lunch on our screened porch, reading my book and watching comings and goings on our quiet street. There's a popular church preschool up the way and, as the half-day session ends during my time on porch, I observe moms and caretakers with toddlers and infants on their way to and fro.

We've lived here close on 30 years and have seen much of this to- and fro-ness; even ourselves participated.

This year, with recession gloom rampant, it strikes me a bit odd to see how many are the newly-bought luxury vehicles seeking our neighborhood's scarce parking spaces. I see Mercedes, BMWs, Lexuses, Audis, Infinitis, and Acuras aplenty, most of them in the crossover/wagon niche between sedan and SUV.

Some say we are now living in a new era of thrift with "America's upper strata experiencing an unfamiliar emotion: luxury shame," but it's equally possible that six-figure incomes are now being a bit more carefully, tho not much less ostentatiously spent — at least in the "recession-proof" DC metro area.

For there is luxury-rampant and then there is luxury-restrained by taste; a difference between glutton and gourmand, between the self-indulgence of the nouveau riche and the well-considered investment of the connoisseur. The distinction began to make a difference in the late 17th c. commercial expansion which preceded the industrial revolution of the 18th. It was then that luxury consumption expanded from the tip of the pinnacle of the tiny social stratus downward to the lesser aristocracy and burgeoning grand bourgeoisie. Prosperity — the general prosperity whose figurative tide lifts many (never ever all or even usually most) boats — is always — more or less — beholden to people who buy not what, from a utilitarian point of view, they strictly speaking need but what, from an emotional one, they nonetheless want. And times of dearth favor the discriminating wealthy whose assets are most carefully protected and distributed (more often than not) among material goods of enduring value.

Hence, I don't think the emotional impetus for Audi-Acura extravagance derives simply from external societal pressures for status-ranking display. Sophisticated and high persuasive advertising may help convince some to make extravagant purchases which enhance their status, express their sense of individuality, and basically just make them feel good about themselves, but its effect is small where a habit of secure and productive investment is strong.

I know that status and emotional satisfaction comes from being out in front of the curve as much as by settling one's bottom into the comfort of a Lexus seat. And I do see lots of Priuses around, but not among those with kids who attend the preschool. No way to be sure, but I suspect that for recession-era high-end consumers the family car of the past couple of decades has morphed from one of the classier minivans, to one of the sportier SUVs, to a new luxury crossover/wagon.

Consider the BMW X3, Acura MDX, Lexus RX, Mercedes W210 and Mercedes GL-Class. (For simplicity I'm leaving aside the Audi Q7, Infiniti FX50, Mercedes M-Class, Volvo XC90, and the like.)

These are vehicles that that cost more than the U.S. median annual household income of 2007. Is it true that their acquisition shows good taste and common sense, as well as an instinct to assert a public and most visible right to a position high above the the crowd of lesser mortals?

Put differently and much more prosaically might the purchase of these vehicles be financially justified in terms of total cost of ownership over a period of years? Are these possessions like the family Rolls Royce of the British upper classes whose initial cost would be high but, since never retired from service, whose cost per year would eventually become negligible?

It's unrealistic to expect Americans, even those of whom I write, to keep their cars forever. Since data are available for 5-year cost of ownership, that's what I'm selecting as the norm. (I really don't know if it's accurate for this group.) Based on this assumption, here are expected overall costs borne by discriminating American equivalents of Anglo aristocrats.

{click to view full size: source: Vincentric via}

As you can see, these cars end up costing a good deal more than your 2008 Honda Civic, whose 5-year cost is a bit less than $30,000. (Go to the Vincentric site to see how the data are calculated.)

How about a comparison with less, shall we say, snobbish cars? Here's another table with such as might qualify in that category for a family that feels it needs more than a sedan.

{click to view full size: source: Vincentric via}

Things still don't look too good for our luxury-minded folk. Even ruling out the Kia, which is there only to show a Civic-like pragmatic alternative, only the Acura among the haut-luxe group seems to make much financial sense. Do you agree?

Supposing, just supposing, that even a family of considerable wealth can do better things with its money than put out for a luxury crossover, might it not be appropriate to consider make and its models that are highest rated in most categories (highest rated as I believe, but I haven't bothered to research this):

{click to view full size: source: Vincentric via}

A confession is probably in order here. I was passionate about cars when young, but now have interest only in classics and, having been burned by actually owning one of those, am content to stick by my bike and drive many, many fewer miles than the national average.

{BMW X3; source: BMW}

{Acura MDX; source: mallorieowens}

{Lexus RX; source:}

{Mercedes W210; source:}

{Mercedes GL crossover; source:}

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