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Life is full of choices. You want a luxury car but your wife wants a larger home. From a purely financial/investment perspective, which is the better choice? One way of looking at this is -if everything else were equal- would it make more sense to put an extra $500 a month towards a mortgage or a car payment and why?
The answers will generally gravitate towards the house because of the following reasons (of course the reason one would buy a luxury car are probably not for long term financial benefit):
1. Maintenance
Even if you struck a great deal on buying or leasing your luxury car, you will be making up for that when you go in for scheduled and unscheduled visits to the repair shop. Not only are regular tune-ups more expensive than mid-size cars, just replacing the wiper blades for a luxury car like a Mercedes S 430 costs over $80!
2. Appreciation vs. Depreciation
In the majority of cases, real estate appreciates progressively -that is it continues to increase in worth over a period of time. The rate at which it does so depends on a variety of factors like location, size of the house, school district and the like.
A luxury car, on the other hand, loses value as soon as you drive it out of the dealership lot. Again, the rate at which it depreciates depends on the make, the mileage and the condition, but you can hardly ever make money on a luxury car.
If you are serious about renting a luxury car or possibly a luxury car lease, you will also want to consdier a luxury car rental before you lease or buy.
3. New Models
 You may be the envy of your workplace for a few months, but come September and dealerships start displaying the next years models and drastically mark down cars like yours. Not only do you feel cognitive dissonance when you compare how much you paid for it, but suddenly the headlights and navigation system in the new model look so much better! Do you want a luxury sports car? Maybe a used luxury car would be a bettery choice...
4. Fuel Costs
A luxury car may offer you style and comfort, but in most cases scores poorer on fuel efficiency. Economy cars like a Camry or a Civic can boast superior mileage per gallon on the highway and in the city as compared to a luxury car like a BMW or a luxury sports utility vehicle like the Hummer.
In addition, many luxury car manufacturers advise that you only use the highest grade of fuel for fill-ups and that in itself can make a dent in your pocketbook particularly with gas prices skyrocketing in the United States, and world, recently.
5. Your Time
Even if you have a long commute or drive out of town frequently, the amount of time you spend in your house will still overshadow the time you spend in your luxury car and therefore it is wisest to put your hard earned money in to something that will repay you over the years.
If you only want to drive a luxury car for an event or a special occasion, you cal always rent a luxury car for a day or two.
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