In tough times, even the richest people need to tighten the purse straps. In order to retain the feel of a luxury car without dishing out the cash, many are turning to cars like the Buick LaCrosse and Hyundai Genesis, as they offer amenities without flamboyance.
Analysts are able to see what vehicles are traded in when new cars are purchased, and thus track the ‘substitution effect’ and how widespread it is. In 2007, 3.5% of new Hyundai and Kia buyers traded in luxury vehicles; that figure rose to 7% for the 2011 model year.
“You could argue that value for the money is the new black, people want to get a good amount of value for the money,” Edmunds senior analyst Karl Brauer said. “Buying a car to impress the neighbors isn’t in any more. Fewer and fewer people can justify spending an extra $5,000 just to have that luxury badge on the hood.”
– By: Stephen Calogera