Luxury Car Dilemma and Alternatives to Steep Prices

The prices of new luxury cars are outrageous today After the G wagon, I went in the opposite direction and bought my mom's 1997 Honda Civic for $7,500. I then went through a number of other cars, including a 1997 BMW M3, a 1995 Nissan Pathfinder, a 1983 BMW 635 CSi Classic, a 2001 Land Rover Discovery II and a new Honda Fit. All the cars cost between $7,500 and $20,000, a good value for money in comparison. Then, in December 2016, while a baby was on the way, I bought a one-year-old Range Rover Sport for $60,000 after taxes. It had 10,600 miles and I found it inexpensive because it was new and sold for about $80,000 after taxes. As I am thinking of buying a new car in mid-2025, when the Range Rover Sport will be 10 years old, I decided to stop by the Land Rover dealership in Redwood City after a few hours by the pool with my children. I hadn't been to a dealership since 2020, so I was curious to see what the prices were for the new luxury cars. The new Range Rover Sports is way too expensive When I arrived at the Land Rover dealership, I was shocked. A brand new Range Rover Sport se cost $104,600 before taxes, or about $113,000 after taxes! This is a 41% price increase since 2016. the car is a beauty with 23" rims, comfortable seats and an updated body style. But wow! That's a lot of money. Then, at the dealership in San Francisco, I examined another Range Rover Sport SE model that cost $119,870 before taxes because it had a sport package and a protective film. After taxes, the car would cost about $130,000. Who can afford these prices? If you're following my house to car ratio for financial freedom, you'll need a house worth at least $6.5 million to justify spending $130,000 on a new SRP. A look at the new luxury electric vehicles After being overwhelmed by the cost of the new Range Rover Sports, I decided to take a look at some Mercedes Benz electric vehicles because he was coming home. Don't shoot me because I'm watching. I have a Tesla charger in my new house and Mercedes and other brands will be compatible with Tesla chargers from 2025. Tesla's are nice, but they are ubiquitous here in San Francisco. I wanted something different. I read all over the news that the prices of electric vehicles have fallen, especially the average price of Tesla's cars. Finally, an electric vehicle may be the way to go. See the graph below, which shows a sharp decline in electric vehicle prices since mid-2022. A better alternative to spending Instead of spending a fortune on a new luxury car, I could buy a well-equipped 2024 Toyota Corolla for $26,000 or a high-end Toyota Highlander for $60,000, which would save me between $106,000 and $140,000. With these savings, I would use 60% for the S&P 500, 25% for treasuries with a yield of 5% and 15% for a private real estate fund.