Hi ozbargainers. I’ve been pondering about this question in the back of my mind for quite sometime now. Maybe I have been paying too much attention to luxury cars on the road while stuck waiting in traffic. I’m seeing plenty of folks driving luxury cars all around Sydney, whether it’s in the Eastern Suburbs or Western Suburbs. I would say a third of the cars on the roads are luxury brands, e.g. Lexus, Land Rover Discovery, Audi, BMW and Mercedes-Benz, Tesla etc… And that got me thinking.
How do most people afford to buy Luxury cars when the median wage in Australia is roughly $55k to $60k a year the last time we had a discussion on this topic a few months ago.
I’m not jealous of folks buying and driving Luxury cars, frankly, I don’t really care what cars people drive but this particular conundrum caught my attention and got me thinking. Could I afford driving a Luxury Car? And the answer is a NO!
I’m currently earning about $75k and single. After Tax, I take home about $1100 a week. Rent is $480 (Rent cost may be increasing in the near future). Phone + Internet + entertainment (streaming services etc..) bills are approx $50 a week. Fuel is approx $80 to $100 per week. Weekly grocery + lunch/coffee are approx $200. A night out on weekend approx $30 to $50.
So all up, my expenditure is about $850 to $900 a week just to survive on bare minimum necessity in life. So, I’d be lucky to save $200 to $300 a week. I know some folks and families are having it tough earning much less and survive on a even tighter budget, but that is for another discussion.
Looking at my wage + living expenses, I couldn’t afford to drive a luxury car. I just don’t have the money, not that I would want to if I had the money to do so. I’m comfortable driving my Kia, taking me from point A to point B.
So my question is, I’m seeing plenty of folks and my peers paying $700 to $1000 a week in rent alone, shopping and wearing designer clothings, eat out at fancy restaurants almost every weekend, frequent weekend getaways, yearly oversea holidays, using new and latest phones and electronic gadgets and driving Luxury cars costing over $90k. All are on a $90k to $110k salary at most. If I were to earn $100k tomorrow, I would only bring home an extra $300 a week. And having an extra $300 doesn’t allow me to spend on luxury things nor can it improve my lifestyle that much. A basic 2 bedroom apartment in the inner Suburbs pretty much costs $650 to $800 a week. So, with a $100k salary (an increase from my current $75k to $100k, hypothetically speaking), I may be able to move and live closer to the city by paying an extra $300 in rent every week. And there goes my $25k increase in salary. I would still only be able to save $200 to $300 a week at most (like i have been doing so on my $75k salary) with no other significant change to my lifestyle.
I have seen folks working in retails (cashiers in Myer etc..) driving luxury cars, got their nails done, hair done + designer brand makeups + monthly botox/cosmetic treatments + perfumes. How are they doing all this? Are most people on a $120k to $150k salary? The median wage figure in Australia doesn’t reflect that.
On my $75k wage, I could barely afford anything. I don’t get my nails done, cut my own hair, no makeups, no botox or cosmetic treatments, no fancy clothes. Still using my old phone from 2016.
I know there are a lot of wealthy folks in Sydney but still, i don’t think they make up for a third of the luxury cars on the road, especially when taken into account of the median wage in Australia. In addition to owning a luxury car, I’m guessing it’s also costly to buy car insurance and on-going maintenance too?
With today’s crazy housing market. I couldn’t afford to pay mortgage if the Bank were to grant me a $1mil loan tomorrow. In most if not all inner suburbs, heck, even in Parramatta, I don’t think you can find anything decent for less than $1.5mil. So how do people service a loan in the $1 to $2 mil range?? Even with a $100k salary, that’s barely enough to service the monthly mortgage for a $1mil loan. Let alone any left over $$$ to spend on luxury cars, and that’s without adding foods + other living expenses to the equations. The maths just don’t add up.
Just having my long shower thought. I’m looking forward to seeing what y’all think about this. Enjoy your weekend, you savvy bargain hunters!
IMHO, your cost of living seems quite high? $480/week can give you a 2 bedroom unit or even a house, which then would cost you more for the electricity and or water. If you live in a shared unit/house, you can reduce it to $200-$250 or if you prefer to save more sometimes I still see a $185/week room and that's in the city.
Assumed you live and work in the CBD, then you'd rarely spend $80-$100 for petrol but let say you use public transport all the time, that would cost about $60/week.
Weekly groceries/coffee also quite high. Cut that coffee intake and do your cooking sometimes, might reduce it to a $100.
So all in all, you might save about $300-$400/week.
I check Lexus Australia and did some calculation with UX All Electric Sports Luxury with the price of $90,712 and $15,000 deposit, 6% interest for 4 years, 10,000 km/year and the estimated repayment is $258/week. So it's purchasable but like you said, doesn't have to. With 130km/h speed limit in NT and 100 km/h speed limit national highway limit, can't use those cars to its speed limit.
Why people buy luxurious car? Some for hobby, some for business and most for pride.