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"86% of all luxury vehicles are driven by people who are not millionaires." This is a good example of one of those stats designed to fool people who don't unde

"86% of all luxury vehicles are driven by people who are not millionaires." This is a good example of one of those stats designed to fool people who don't understand statistics. According to wikipedia there are ~9.3 million millionaire households in the US representing ~7% of US households. [1] Meaning that millionaire households purchase luxury cars at a far higher rate than non-millionaire households which is the opposite of what this article implies. [1] http://en.m.wikipedia.org/wiki/Millionaire http://en.m.wikipedia.org/wiki/Millionaire

groaner 16y ago
I don't think I got the same message from the article as you did. The unstated assumption that the article is trying to challenge is that luxury vehicles are the exclusive domain of the rich. Even if the statistic were that 43% of luxury vehicles were purchased by non-millionaires instead of 86%, it would still say a lot about how these purchases are actually distributed.
- jamiequint 16y ago
  I think the fact that luxury goods have become attainable by non-millionaires says a lot more about the decrease in cost in luxury goods than the irresponsibility of non-millionaires. The classification of these goods is also confusing. For example, I drive a Lexus IS250 AWD which would be considered a luxury vehicle but actually comes in at the same price point as Toyota 4Runner. Additionally, the variance in prices between luxury and non-luxury goods is decreasing. A low-end Lexus now costs less than $10k more than a similarly equipped Subaru Outback or Honda Accord, making the difference when it comes to actual affordability pretty small.
  - byoung2 16y ago
    The difference in cost between a luxury item and a regular item is also masked by the availability of credit. You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased.
    - timr 16y ago
      "You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased." ...which makes the bottom line even more pathetic. You make your payment on the Honda Accord, and after a few years, you own it. It continues to be drivable, and the amortized cost of ownership begins to decline. If you hop on the luxury-car leasing merry-go-round, then sure, you get to drive a new car every few years, but the payment never goes away. Meanwhile, you've almost certainly over-paid for the car relative to what it would have cost to buy up front. When it comes to cars, the financially responsible question is not "4Runner or Lexus?"; it is: "can I live without one?"
      - jamiequint 16y ago
        I think 'can I afford to live without it' is a miserable way of going through life. I certainly could live without ever going to nice restaurants, trying things like kiteboarding and skydiving, going snowboarding or mountain biking, but why forfeit things I enjoy so I can look at my bank statement and see a slightly larger number at the end of the month than I would otherwise?
        timr 16y ago
        I'm not advocating asceticism -- if owning a car is so important to you that you're willing forgo other luxuries to do it, then that's your choice. But don't pretend that it's always a sacrifice to live without owning a car, or that the choice to own one is automatically financially prudent. For many of us, cars are nothing more than a rarely used, depreciating asset with high maintenance costs that gets us from point A to point B. I'd rather rent one occasionally, and spend the money I save on all of the other things you mention.
        jamiequint 16y ago
        Cool, I see your point. If I rented a car to go snowboarding/mountain biking as much as I do I'd very likely spend almost as much as owning one ;)
  - wjy 16y ago
    Good point. Maybe we should stop thinking of Lexus and Acura as luxury brands. Real luxury brands are the ones those of us in the middle class can't even consider buying. Maybach. Bentley. Rolls Royce. Bugatti. I could drive a Lexus today if I wanted. Even a BMW. I don't think I'll ever have enough money to blow on a Rolls.
- danudey 16y ago
  What I got out of it is that people with a lot of money (i.e. millionaires) tend to get there by being frugal and responsible with their money. Lots of other people, however, tend to buy big flashy items that say 'look at how much money I have', but buy them all on credit and then put all their disposable income into paying off their flashy lifestyle instead of accumulating lasting wealth. Moral of the story: being rich and acting rich are two different things.
nowarninglabel 16y ago
Silly, rich people don't drive cars, their chauffeurs do. Home, jeeves.
- lsc 16y ago
  Actually, every time I hear about anyone talking about blowing a hundred grand on a car, I think "wow, I could spend $20K on a car and hire a driver for two years!" I mean, nice cars are nice, but a driver? that'd be real luxury. It's also got a better justification; I mean, if you drive a lot, with a driver, those could be billable hours! I mean, if we are going to talk about ridiculous fantasies of wealth, that's mine.
  - yardie 16y ago
    But when you have that much money you can do both. After seeing what rich people (I mean really rich, not investment fund rich) will spend money on I really think most people are just mentally shut off from what a billion dollars means.
jonhendry 16y ago
I wonder how many are driven by the children of millionaires, who are not millionaires in their own right.

groaner 16y ago

I don't think I got the same message from the article as you did. The unstated assumption that the article is trying to challenge is that luxury vehicles are the exclusive domain of the rich. Even if the statistic were that 43% of luxury vehicles were purchased by non-millionaires instead of 86%, it would still say a lot about how these purchases are actually distributed.

jamiequint 16y ago
I think the fact that luxury goods have become attainable by non-millionaires says a lot more about the decrease in cost in luxury goods than the irresponsibility of non-millionaires. The classification of these goods is also confusing. For example, I drive a Lexus IS250 AWD which would be considered a luxury vehicle but actually comes in at the same price point as Toyota 4Runner. Additionally, the variance in prices between luxury and non-luxury goods is decreasing. A low-end Lexus now costs less than $10k more than a similarly equipped Subaru Outback or Honda Accord, making the difference when it comes to actual affordability pretty small.
- byoung2 16y ago
  The difference in cost between a luxury item and a regular item is also masked by the availability of credit. You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased.
  - timr 16y ago
    "You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased." ...which makes the bottom line even more pathetic. You make your payment on the Honda Accord, and after a few years, you own it. It continues to be drivable, and the amortized cost of ownership begins to decline. If you hop on the luxury-car leasing merry-go-round, then sure, you get to drive a new car every few years, but the payment never goes away. Meanwhile, you've almost certainly over-paid for the car relative to what it would have cost to buy up front. When it comes to cars, the financially responsible question is not "4Runner or Lexus?"; it is: "can I live without one?"
    - jamiequint 16y ago
      I think 'can I afford to live without it' is a miserable way of going through life. I certainly could live without ever going to nice restaurants, trying things like kiteboarding and skydiving, going snowboarding or mountain biking, but why forfeit things I enjoy so I can look at my bank statement and see a slightly larger number at the end of the month than I would otherwise?
      - timr 16y ago
        I'm not advocating asceticism -- if owning a car is so important to you that you're willing forgo other luxuries to do it, then that's your choice. But don't pretend that it's always a sacrifice to live without owning a car, or that the choice to own one is automatically financially prudent. For many of us, cars are nothing more than a rarely used, depreciating asset with high maintenance costs that gets us from point A to point B. I'd rather rent one occasionally, and spend the money I save on all of the other things you mention.
        jamiequint 16y ago
        Cool, I see your point. If I rented a car to go snowboarding/mountain biking as much as I do I'd very likely spend almost as much as owning one ;)
- wjy 16y ago
  Good point. Maybe we should stop thinking of Lexus and Acura as luxury brands. Real luxury brands are the ones those of us in the middle class can't even consider buying. Maybach. Bentley. Rolls Royce. Bugatti. I could drive a Lexus today if I wanted. Even a BMW. I don't think I'll ever have enough money to blow on a Rolls.
danudey 16y ago
What I got out of it is that people with a lot of money (i.e. millionaires) tend to get there by being frugal and responsible with their money. Lots of other people, however, tend to buy big flashy items that say 'look at how much money I have', but buy them all on credit and then put all their disposable income into paying off their flashy lifestyle instead of accumulating lasting wealth. Moral of the story: being rich and acting rich are two different things.

nowarninglabel 16y ago

Silly, rich people don't drive cars, their chauffeurs do. Home, jeeves.

lsc 16y ago
Actually, every time I hear about anyone talking about blowing a hundred grand on a car, I think "wow, I could spend $20K on a car and hire a driver for two years!" I mean, nice cars are nice, but a driver? that'd be real luxury. It's also got a better justification; I mean, if you drive a lot, with a driver, those could be billable hours! I mean, if we are going to talk about ridiculous fantasies of wealth, that's mine.
- yardie 16y ago
  But when you have that much money you can do both. After seeing what rich people (I mean really rich, not investment fund rich) will spend money on I really think most people are just mentally shut off from what a billion dollars means.

jonhendry 16y ago

I wonder how many are driven by the children of millionaires, who are not millionaires in their own right.