BMW and Mercedes Buyers See a Ford in their Future (Bloomberg)

[Corey]

Quote from chewbacca:

why do almost all luxury car makers require premium fuel when premium fuel offers almost no advantage over regular fuel?

Higher octane reduces spontaneous ignition. Spontaneous ignition is the cause of engine knock which can do significant damage to the engine over time.

Consider the extra $2.50 you pay a fill-up to be an insurance premium against your engine needing a replacement, which on luxury sport cars can be hand-built and cost a fortune to replace.

 

[clacy]

Quote from newtoet:

I would say 70% of people who drive luxury cars lease them. That is why you see apartment complexes filled with BMWs, Lexus', etc.

Those numbers are substantiated by my next door neighbor who is GSM at a local BMW dealership.

Seriously, do you guys think these guys are taking out a 6 year loan and paying $1000/month? No, they are jumping all over the manufacturers special leasing. These cars will keep selling, especially as younger people think they are "entitled" to them and have no concept of the cost of something (or the value of money).

Yes, 70% sounds pretty accurate. I remember seeing a stat that 60% of all luxury vehicles were leased several years ago (4-5 maybe). I would assume that figure has probably increased since then even.

 

[ByLoSellHi]

The wealthiest people I've met (30 million and up in liquidity), and I've met a few through people I know - the truly wealthy ones - drive 7,8 or 9 year old cars, with 100k+ miles on the odometer, and could give a rat's ass what anyone thinks about it. They're the cheapest, stingiest bastards you'd ever want to meet.

The people I meet that are the typical show offs with some exotic sheet metal are more often than not fly-by-night promoters, exploiting some temporary bubble in the economy. Everyone is their best friend, and the drinks and food are always on them. They love it, according to their own testimony, "when everyone makes money." As soon as the bubble deflates, they and their cars are no where to be found, and a bunch of naive investors are looking for them, much poorer for the wear.

Obviously, there are exceptions to most rules, including this one. Exceptions are rare, though.

 

[Epiphany]

Quote from monty21:

This discussion would be greatly enhanced if we argued with actual statistics instead of just speculation.

Yes, a lot of people lease cars and others buy... so what? What is the difference if some young kid leases an expensive car and pays 500 a month? There are other kids whose parents bought him that car. No way of knowing for sure, so no need for the stereotypes.

Of course there is a difference. The young kid leasing an expensive car is basically using LEVERAGE while the kid whose rich parents bought him the car is not.

If sales of luxury cars are tied to the FORMER, then it means that sales are even more sensitive to the recession than previously thought.

 

[Landis82]

Quote from Corey:

Higher octane reduces spontaneous ignition. Spontaneous ignition is the cause of engine knock which can do significant damage to the engine over time.

Consider the extra $2.50 you pay a fill-up to be an insurance premium against your engine needing a replacement, which on luxury sport cars can be hand-built and cost a fortune to replace.

Exactly.
Moreover, NOT ALL premium grades of fuel have the same octane in the U.S.

Here in California, the oil companies got together with the pipeline company ( Kinder-Morgan) and chose not to produce 92 octane anymore.

They lowered the octane rating for PREMIUM to 91 in the Fall of 2001.

It sucks.

 

[woodstock]

I seem to recall that in The Millionaire Next Door, the most common car name was Oldsmobile.

 

[forextrades]

Quote from Corey:

Higher octane reduces spontaneous ignition. Spontaneous ignition is the cause of engine knock which can do significant damage to the engine over time.

Consider the extra $2.50 you pay a fill-up to be an insurance premium against your engine needing a replacement, which on luxury sport cars can be hand-built and cost a fortune to replace.

I don't believe that is true these days unless the car is not naturally aspirated, as turbo charging or supercharging raises the compression ratio and would require premium gas.

Most cars today will run perfectly fine with 87-octane and last for a very long time. The computers in today's cars adjusts for the octane rating.

 

[ByLoSellHi]

The octane rating is a measure of the autoignition resistance of gasoline and other fuels used in spark-ignition internal combustion engines. It is a measure of anti-detonation of a gasoline or fuel.

If your engine has a low compression ratio, high octane won't do any harm, but you're wasting money.

If it's the other way round, the engine MAY knock - and if it does, and the onboard computer doesn't kick in to stop the knocking (caused by pre-detonation) AND your engine keeps knocking, it may eventually get damaged.

Manufacturers of certain vehicles and motors recommend higher octane fuel for specific motors (especially turbo or supercharged) as an idiot proof measure to ensure customers do not ignore knocking caused by lower octane fuel, thus damaging their engine over protracted periods of time.

There's no relation between octane and performance, energy content of the fuel, nor the speed at which the flame initiated by the spark plug propagates across the cylinder. It is only a measure of the fuel's resistance to autoignition.

 

[newguy05]

the thing is if you lease, some of the luxury cars really dont cost that much more than their average counterparts after lease specials.

For example i was quoted for acura tl $340 + $0down, rl $480 + $0down. Compared to an average camery LE for like $230/mon + $1k down.

I mean for maybe $200-$300 more a month, you drive a lot better car. That's like 5 pts on the es mini a month

 

[dandxg]

Quote from forextrades:

I don't believe that is true these days unless the car is not naturally aspirated, as turbo charging or supercharging raises the compression ratio and would require premium gas.

Most cars today will run perfectly fine with 87-octane and last for a very long time. The computers in today's cars adjusts for the octane rating.

Yes true from my own experience. I own 2 toyotas one is regular the other is suggested premium. I can run 85 on both, lower octane for higher alt. in Denver, but if I run 85 in the one the likes 91 I lose about 20% HP and get a little less MPG. Neither of them have had engine knock.

Most of the cars in Europe I have seen first hand require higher octane because they have small high comp. engines. High comp. is one way to get more HP.