Can you really afford a luxury car?

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Can you really afford a luxury car?

Maybe you’ve always dreamed of owning a Ferrari or other exotic vehicle and you're just waiting for the day your income allows for such an extravagant purchase. Or perhaps you’ve stumbled upon a pre-owned version of the car of your dreams and you're ready to take the plunge. But can you really afford the purchase?

Sure, the sticker price may be within your budget, but there are other costs to consider, and we’re not just talking about car insurance coverage.

Maintaining a luxury car

To get a better understanding of what the maintenance and routine operating costs are like for high-end, exotic and luxury performance vehicles, we spoke with Donald Osborne, a classic car historian, assessor and host of the recurring segment, Assess & Caress with Donald Osborne on CNBC's Jay Leno’s Garage.

“The great strength in the luxury and exotic market has been the rise of leasing in the last 15 or 20 years,” Osborne said. “Practically no one buys a new luxury or exotic. They’re almost all leased."

That has led to a significant pre-owned market for these cars as well, with some being offered at or near the cost of a mid-priced, new vehicle. While this accessible pricing can make these cars tempting, it’s important to consider how much it will cost to maintain one of these automobiles.

For example, let’s consider a Maserati GranTurismo Sport. It lists new for around $145,000. At the time of this writing, you could lease the GT for about $1,700 a month for 36 months with just under $10,000 due at signing.

Obviously, with a three-year lease like this, the car would be under warranty the entire time you lease it, so there wouldn’t be any significant additional costs, right? Well, maybe.

Let’s consider the tires as an example.

“A nice, soft tire can give you much greater performance, but it’s going to come at a cost, obviously,” Osborne said. “All that great handling and all that, the adaptive suspension demand very sophisticated tires.”

You can probably expect to replace tires on the Maserati GT at around 7,000 miles. And they can cost between $250 and $500 each. Sure, you can buy some cheaper tires, but as Osborne points out, little things like tires and gas octane can make or break performance in these vehicles. And if you’re not going to get the performance you paid for, what’s the point in owning the car?

That’s why the ongoing maintenance costs are so critical in determining whether you can really afford a modern exotic vehicle. So how much does it really cost? Obviously, that’s going to depend on the specific vehicle, but there are some basics that will help give you a better idea.

Oil changes are more expensive ...

You won’t be able to just head over to the Jiffy Lube and get a quick oil change with your Porsche, Ferrari or McLaren. OK, technically you can, but it’s probably not a good idea. As with all services on these vehicles, it’s good to find a mechanic that specializes in your particular vehicle, even for oil changes (which can cost $300 or more for some exotic cars).

... as is gasoline ...

A lot of modern cars are engineered for maximum performance using regular unleaded gasoline. That’s not the case with exotics and performance vehicles. They’ll typically perform best using gasoline with a higher octane, like premium unleaded, which will probably end up costing you a few hundred extra dollars each year, depending on how much you drive. That doesn’t mean regular unleaded is going to hurt one of these cars, though.

“The electronic controls for ignition will basically allow a modern car to run on anything, but the way it does that is it adjusts the performance of the engine,” Osborne said. “So don’t expect to get high performance out of your high-performance car if you’re putting regular gasoline in it.”

The only gasoline faux pas Osborne warned against is running out of gas. “You don’t ever want to get down to the bottom of your tank, because you never know what’s going to be there,” Osborne said. So feel free to top it up with some regular unleaded if you can’t get premium and you’re running low.

... & parts & labor ...

The average hourly rate for Nissan mechanics runs around $125 an hour, Osborne said, while the hourly rate for Maserati mechanics runs around $197.

“Given the price differential in the cars, that’s not that much,” Osborne said. “Of course, there is the differential in parts costs as well.”

That differential can be pretty significant. For example, air filters for a Nissan 370Z will run around $50 or $60. An air filter for the Maserati GT runs closer to $160.

So even if you could pick up an exotic car that is out of warranty for about the same price as you could a mid-priced new car, your maintenance costs each year could be significant and something you’ll want to budget for.

“These cars are designed to be maintained in a way that parts are replaced before they wear out,” Osborne said. “That’s what makes running one of these cars so expensive.”

One way you can keep your routine maintenance costs down is to ask your mechanic questions, Osborne said. Oftentimes, mechanics will put together a list of services your car may need on top of any particular issue you may have taken it in to address.

Osborne suggests having the mechanic review the items with you, explaining which need to be addressed right away, which can wait a bit and which are simply “nice to haves.” This approach can help you budget for repairs you know you’ll need in the coming months.

... & those tires!

It’s not just the Maserati that likes expensive tires. Most high-end performance vehicles typically run on tires that cost significantly more than those for your standard Audi or BMW. They also need to be replaced far more frequently, some as often as every 5,000 miles. Still others, as Osborne pointed out, require directional tires. That means there’s a front left, front right, rear left and rear right tire and they aren’t interchangeable. One example is the Porsche 918 Spyder. You can expect to pay between $450 and $500 per replacement tire.

The last thing you want to do is buy your dream car only to leave it sitting in your driveway because you can’t afford to drop a couple thousand dollars on a new set of tires every year just so you can pass state inspection.

Your insurance may go up ...

These cars typically have a higher value and replacement cost, so it’s possible you’ll see your insurance premiums increase when you buy an exotic vehicle. It’s a good idea to talk to your company or agent before purchasing a new vehicle to see what the coverages will cost.

... & you’ll probably hit your deductible quicker.

If you’re in an accident, even a minor one, chances are you’re going to hit your deductible right away given the cost of replacement parts and labor. Even something as minor as a cracked windshield could hit your deductible if you have glass coverage. On a standard car, like a Toyota Camry, you’ll probably pay $250 to $300 to replace your windshield. Don’t be surprised if it costs $800 or more if you’re driving an exotic.

What to look for if you want to buy a pre-owned exotic or performance vehicle

It’s important to know how the car was driven by its previous owner, Osborne said. Was it driven regularly? Did they take it to the track? Was it driven daily as a commuter car, or does it have primarily highway miles? Did the previous owner have it serviced properly? Are there any outstanding recalls? Being able to answer all of these questions can help you determine what your ongoing maintenance costs may be.

In the end, these cars deliver a level of enjoyment that can be worth the price to many people, but it’s good to bear in mind that the cost of routine maintenance will always be tied to the vehicle’s original purchase price, not what you may end up paying for it as a pre-owned vehicle.

“The purchase price is just the beginning,” Osborne said. “You have to keep it on the road.”

Image: SrdjanPav