Top Ten List: Why Buy A Luxury Car

The luxury car market is hurting along with the rest of the auto sector, with sales at record lows. But luxury automakers are still hoping their history of solid engineering, performance and brand cachet will convince tentative buyers it's worth it to shell out the extra thousands to buy their cars.

Like any other vehicle purchase, however, it depends on what you need--and on how much you care about your image, of course. Not everyone who owns a Porsche 911 or Audi R8 cares about their superior handling--some just want to be seen driving them.

"It's about emotional connections that people can make with a brand and how it makes you feel," says Wes Brown, a principal consultant at Los Angeles-based consumer-research firm Iceology.

But there's more to luxury cars than prestige. Premium cars offer the most advanced safety options and best entertainment technology on the market, not to mention some of the plushest interior and most options for customization.

It's not that vehicles from midrange brands like Ford Motor and Honda aren't safe or don't offer optional high-class amenities. But with standard features like heated leather seats and headrest-mounted DVD players, there's an undeniable allure to owning a luxury car.

Tough Times for Luxury
Despite the appeal, it is not the best of times for luxury carmakers. Last month, Acura's sales dropped 29.7% from January 2008; Audi, 26.4%; BMW, 15.5%; Cadillac, 42.5%; Land Rover, 34.4%; Mercedes-Benz, 42.9%; and Porsche, 36.1%, to name a few. Ultra-premium brands like Bentley and Ferrari fared even worse, down 74.4% and 52.4%, respectively. It's the first time a downturn has so deeply affected America's luxury segment, says BMW North America President Jim O'Donnell.

"This is the first time, I would say, since 1931 there was such a recession, because there were always areas of the country that [kept luxury cars] popular," O'Donnell says. "Now, everywhere has been affected."

O'Donnell says luxury brands will rebound quicker than the rest, however, thanks to financially healthier dealerships, better leasing and certified pre-owned programs and loyal customers. In some respects, he's already being proved right: Jaguar posted a surprising 17.6% sales gain last January from the same period a year earlier. And Audi, BMW and Mercedes-Benz each gained 0.1% of market share in 2008.