By on January 10, 2020

Rich people are just like us: they put on their pants one leg at a time, they walk upright, and they enjoy winters at their villa in the south of France. Okay, maybe they aren’t exactly like us. My villa is in Spain.

One other thing they do? Buy cars, apparently. A quick perusal of 2019 total year sales numbers show that while mainstream makes like Ford and Chevy fell into the red compared to the same timeframe one year ago, there’s no shortage of growth at the big money brands.

It helps to focus on volume in this instance rather than percentages, though we will list both, as a smaller sample size can create disproportionate numbers. Failure to do so would result in breathless headlines proclaiming McLaren sales have jumped by two-thirds versus the previous calendar year.

That is a real number, though. In 2018, the supercar brand sold approximately 1,368 cars in the United States. Last year? Try an estimated 2,286. This is a huge jump, not all of which can be attributed to new product. Arranging its offerings into Sports, Super, and Ultimate Series models has had the effect of cataloging the McMenu into an easier to decipher lineup. Obsessed gearheads like us know the difference between a 570S and a 675LT, but never underestimate the need to explain stuff to rich people.

Porsche is in the same boat, adding about 4,000 units to its annual sales volume last year. This represents a roughly 8 percent increase and marks the first time the brand has crested 60k. That number about triple its total of just 10 years ago in the Bad Old Days of 2009.

Slightly out of the stratosphere, der German trio of Audi, BMW, and Merc didn’t lose any ground in 2019, either. The bookends there were up about a percentage point, while the blue-and-while propeller rose 4.4 percent in terms of volume to 324,826 vehicles. That’s within spitting distance of mainstream brands like VW, for example.

Speaking of, the two snazzy Detroit brands also enjoyed an increase last year. Cadillac added 1,544 vehicles to its bottom line, ending up at 156,246 units. Its cross-town rivals at Lincoln found 8,617 new customers, settling at 112,204. The latter can look at a portfolio of new and well received product as reward for that solid sales performance. Your author would like to think that a return to real names helped as well; compare a lineup of MKC, MKX, and MKT to a roster including Corsair, Nautilus, and Aviator. It’s tremendous.

Can this continue? A few economic talking heads seem to think so. Goldman Sachs is yammering that the U.S. economy is “structurally less recession-prone today”, stopping just short of saying its recession-proof. Some of the major recession headwinds have dissipated, they say, which can only be good news for people who buy McLarens and Audis. I’m not sure these declarations are as impactful on the lives of everyone else, though.

In our year-end round up, we asked if you or anyone in your circle drove home new wheels in 2019. Thanks for your answers. We’ll re-up today but with a twist: did a member of yer crew sign on the line that is dotted for any of the brands listed in this post? Let us know below.

[Images: Porsche, Lincoln Motor Company]

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40 Comments on “Who’s Buying New Cars? Well, the One-percenters, at Least...”


  • avatar
    dividebytube

    I have a – probably bad – theory that some of the CUV craze is being driven by the folks who can afford to buy them new. Older people, like my 78yo parents, who want a vehicle that’s easier to get into versus a low slung car.

    When I first bought my Mustang my dad wanted to take it for a drive. He got in… and it took me another minute to pull him out. He couldn’t see over the dash because his height of the past has become greatly diminished with a scrunched up back.

  • avatar
    jimmyy

    I split my time between homes on the east and west coast. And, I see the surge of new supercars … especially in Newport Beach, Ca. Porsche GT2s and GT3s, McLarens, Ferraris, Astin Martins, Rolls Royces, and Bentley SUVs are everywhere. Hard to believe. Even in Wellesley, Ma, I am seeing a lot of high end Range Rovers. In Tribeca, lots of Bentleys. While these areas have always had their share of supercars, nothing of this magnitudde has ever happened before.

  • avatar
    Lie2me

    I think A LOT of the CUV craze is being fueled by aging boomers. I’m so comfortable in my sit up straight, easy in and out, vision for days crossover that I’ve actually become very uncomfortable in standard cars. The problem with older people buying cars is they don’t do it that often and tend hold them awhile, which is not the ideal business model for the auto industry

  • avatar
    Glenn Mercer

    I think at a very high level the basic conclusion must be true. That is, the last time we saw 17 mm new sales (2000 was it?) the country had millions fewer people and lower GDP. Now we are at 17 mm sales again, but to a larger and richer country. So the % of the population buying new cars (note I do not say CARS, I say NEW cars) is smaller than it was, and I think one can make the leap from there to “richer buyers.” Various sources show the average household income of a new-car buyer to be about $100,000, while for the USA as a whole I think it is closer to $60,000.

  • avatar
    dividebytube

    I live in the nosebleed seats of a pretty wealthy suburb. I’ve seen one McLaren, two Ferraris, and one Lotus in my area. Range and/or Land Rovers are “fairly” common, but not as much as Audi, Mercedes, or BMW. Teslas are also no surprise either.

    The most popular vehicles? Honda Odyssey or a GMC Denali Yukon.

    I drive one of maybe three Mustangs that I’ve seen in the area. Pickup trucks aren’t as common either with a lot less of them than other areas I’ve lived.

    It’s a weird place to live since I feel positively poor compared to the rest of the wealthy denizens.

  • avatar
    FThorn

    I heard an automotive press type person (can’t recall who) say that for the most part new cars are for “rich people” and everyone else (wisely) buys used; and that’s how the dealerships run their business… focusing on USED.

    Makes sense. Average ( not median ) transaction price is higher than $30,000 for new. I’ve never sunk that amount into a depreciation car. It’s a steep expense, for sure.

    • 0 avatar
      jack4x

      This is the way it’s always been.

      The median priced new car has never in history been affordable to someone making the median income.

      • 0 avatar
        golden2husky

        True. The reality is that for at least half the country, a new car is an impossible reach. The median income is $63,000. If you have a kid or two and are paying rent, that means a used car. And living paycheck to paycheck. Pretty scary considering the wealth in this country.

  • avatar
    watersketch

    My 70 year old Mother-in-law traded her Mercedes C300 for a GLC300 (with AMG floormats) and couldn’t be happier with the higher-riding vehicle. In the tradition of Merc the navigation system is awful and we have already given up on it in favor of the cellphone. The sound system however is pretty awesome.

    • 0 avatar
      Tele Vision

      @ watersketch

      My now 76(?) year-old Mom had an RDX for a while. She got rid of it so as to get an Audi A4, as they were still sold with a manual transmission. She didn’t know that it had six gears, though: “This thing is bloody amazing on the highway!” I’d bet it was, zinging along at 3000 RPM.

  • avatar
    28-Cars-Later

    That’s true at least in part as the used cars generate more profit than new ones.

  • avatar
    MrIcky

    My perception is the CUV craze is fueled by new or newish parents. All anecdotal of course, but I’ve seen so many young families buy a new CUV then announce a pregnancy shortly after or have a baby and “realize they need” a CUV within a few months.

    I also think thats a keeping up with the Jones’, social media sort of thing where thats what the young hip parents do so they can have adventures.

  • avatar
    dividebytube

    @MrIcky

    In 2000 when my wife and I had our first kid, we eventually traded in the 1997 Altima we had. It was a pain – for my back – getting that baby seat into the back seat. Also the lack of room for the one of us that rode in back with the baby. It was a lot easier with the replacement: a 1997 Mountaineer.

  • avatar
    1500cc

    “quick perusal” is an oxymoron

    /pedant

  • avatar
    MorrisGray

    I like to buy new cars whether my income is $30k or $60k, but I tend to keep them for a while like the three I currently own that I bought new…. 2012 Hyundai Genesis, 2006 Mazda3 , 2002 Chev Silverado

    .. I have been shopping to buy another vehicle new for over a year but have not found the right vehicle for me at the right price. Mostly because I want to replace my daily driver which is the Mazda3 5sp that I own. I would like to buy another manual transmission but I don’t really want a turbo assisted motor. I don’t like start/stop, lane keep assist and a bunch of other new technology that comes standard with new cars today and also is what drives up the insurance cost for everybody as well as the actual cost of the car itself. I bought my 2006 Mazda3 sedan manual for like $15k new and now the only way to replace it with another Mazda and a manual transmission is to pay for a premium spec Mazda3 hatchback around $30k. And I don’t really want a hatchback, I certainly don’t like the new Mazda3 hatch and I am unwilling to pay $30k for a Mazda3 hatchback! Most other cars that come with a manual are turbo assisted like the Honda Accord, VW GTI or Jettal GLI, Genesis G70 2.0T, etc…. L am getting older and I am not in to leasing a car and I still prefer older technology that works! Or has been proven to work. No CVT for me either and if I have to settle for an automatic then it needs to have a six cylinder motor. VW reliabilty scares me, BNW, Audi, Volvo, Merc Benz reliability scares me. Toyota makes good engines but why doesn’t the Camry come with a manual transmission or rear wheel drive, Lexus no longer has a manual in the IS350 or any IS model and the GS is too costly for my taste. Plus all Lexus vehicles require premium grade fuel where the Toyota cars only require regular grade gas even though they share the same engine!?! ???Why??? I know, tuned differently. Well crap on that… JMHO :)

  • avatar
    JMII

    I think all these luxury / high end SUVs has increased their overall brand awareness. Before people with money only saw exotic sports cars or expensive sedans, neither of which meet their needs. However with CUVs and SUVs available as choices from all the fancy names the big spenders can have their cake and eat it too.

    For the record my brother bought a Cayenna Hybrid last year, however it was used not new. He bought a used Boxster two years ago which caused a completely re-calibration of his choices in transportation. The once acceptable VW and Audis of years past are now seen as lame.

  • avatar
    FThorn

    The auto commentator posited not about average, but all new cars are essentially only purchased (not talking about lease “Affordability” entering his comment) by the very highest income/wealth folks. This, as they stated, was a sea change, a marked transformation or departure from the past.

    Again, their words; not mine, but I can see his point. I don’t even care to back it up with research, not that important to me in my day’s tasks.. But I thought worthy of chin tap.

  • avatar
    Felix Hoenikker

    We purchased a new Infiniti QX50 last January as a replacement for my wife’s 99 Honda Odyssey minivan with 140k miles. I spent hours at the Infinite dealer negotiating the sale. I have always been a buyer and never leased a car since I tend to keep cars for 10 years and correctly assumed that more buyers of luxury cars lease them than mainstream brands. What surprised me is that at least at this particular dealer, 80% of the vehicles are leased according to the F&I guy there.
    I would like to know what percentage of the overall luxury market are leases and are they trending up down or steady as a total fraction of sales.

  • avatar
    DenverMike

    Above a certain tax bracket, and or wealthy zip codes, you’re basically forced to buy new and luxury.

    Otherwise folks making decent coin are free to keep driving what they have, or even put serious money into upgrades/mods/upfits besides repairs.

    The average new vehicle “trasactional” leaves a lot of money on the table for a clean classic restomod, muscle, pony, 4X4, Jeep Wrangler, sports/sporty, etc, plus invest the rest.

    It’s not (just) that new vehicles are overrated, but there’s never been so many choices/alternatives for those that want a nicer car/truck, have more than enough money/credit/income to buy brand new, but simply chose not to.

    They may even be willing to pull out some tools and get their hands dirty in the process. Yeah really! Now what would they say about that kind of nonsense in Newport Beach???

  • avatar
    Tummy

    I think part of it is related to the fantastic year in the stock market of 2019 and for the last several years. Even S&P500 index funds were up around 29%, Nasdaq 35%. When you have a $1m invested, you just gained $300k-350k. Why not buy that fancy car you have been thinking of.

    Nearly half of Americans don’t have any stock investments and the richest 10% have over 80% of the total value of stocks. I think this is why we’re seeing the high-end car volumes increasing.

  • avatar
    forward_look

    Every marketing department knows that nobody over 40 has any money, and they don’t buy anything.

  • avatar
    multicam

    To answer the question, I bought a new Wrangler in 2019. Two door manual transmission Rubicon for under $40k out the door. Though that’s cheap for a new Rubi nowadays, it still seems super expensive to me and thus it is staying stock till at least the warranty runs out.

  • avatar
    dal20402

    This isn’t just being driven by the aging 1%, but also by younger middle-class strivers. As the mainstream luxury brands have increasingly propped up their numbers through subsidized leases, it has become nearly mandatory to drive a luxury brand if you want to show that you’re going places. A bunch of people who used to buy mainstream are now signing $449/month leases for GLCs and X3s.

    We are in that group but are bucking the trend with our Toyota and Chevrolet (although, thankfully for us, we’re in a place where their respective hybrid and EV powertrains give a lot of green cred despite the mainstream branding).

    • 0 avatar
      golden2husky

      I’ve notice a lot of younger people – some with good income potential, others not so much – buying used, but insisting on snot brands. They are only interested in the badge, and when that $8,000 BMW needs a $3K repair they freak out and run up their credit cards to keep it on the road.

      • 0 avatar
        dal20402

        If you’re someone focused only on the badge, it’s incredibly silly to buy used. Absolutely the cheapest and best way into a car that will impress your equally superficial friends is the $449/month subsidized lease.

        Now if you don’t have good enough credit for it, that’s another situation.

  • avatar
    redgolf

    Lie2me – “The problem with older people buying cars is they don’t do it that often and tend hold them awhile, which is not the ideal business model for the auto industry”

    I disagree! I’m 70 and on my 3rd lease vehicle which does help the industry, why lease? Cheaper payments and no out of warranty issues! Besides I’ve worked long and hard, so why not enjoy my rides plus new vehicle every 3 or so years, hope to go BEV in 2023!

  • avatar

    So to the comment that new cars were never bought by the masses from the late 50’s until the late 70’s they were actually. Cars were in general more affordable to the average income. I think as I recall from data a median new car in 1975 was about 30% of the median household income today it’s more like 50% that’s a big change.
    There are a lot of factors to that, one being most cars are sold more loaded up then before but that’s kind of a self feeding machine.
    Income for the top 15% of income earners has done much better then the rest. So you have a large gap of people who could easily drop 50k on a new car without it affecting their finances and the majority of the population that would go broke financing a 28k car.
    Some of this is driven by age etc older people buy the majority of cars (average new car buyer is well into their 50’s and that number rises almost every year) which I’m sure is part of the deal with CUVs.
    But I think the big takeaway is the wage and wealth gap. you have a smaller pool of buyers with more money to spend.

  • avatar
    Lie2me

    @redgolf, I should have justified my comment with the exception to the rule which are guys like you and my neighbor who are so afraid they might have to replace a windshield wiper that they continually lease new. Did you get that $100/month lease/ 3000 miles per year?

    Just kidding, to each his own :)

  • avatar
    MorrisGray

    Hey that is funny, I think I would lease two new cars for $100 a month and the three thousand mile limit!

  • avatar
    redgolf

    Lie2me – actually I just replaced a right side wiper on my original owner 97 Pontiac GP, It’s my around town/golf course drive!Those wiper blades are expensive, I think I paid $26 for one, not like the old days when you could buy 2 for like $6.I got the $300/10 k/yr fleece, I mean lease! ;-) I don’t mind giving back to GM since in effect they pay me to lease a nice new vehicle by providing me with a pension and no I don’t change my own oil either anymore! I found that paying $42 twice a year for an oil change and tire rotation is well worth it, my days of scooting underneath a vehicle are over, 2 hip replacements and a future knee replacement will not allow me!I do wash and clean my own vehicles, even painted the Chevy bow tie emblems on the new Equinox black, the wheel cap bow ties also, didn’t like the gold stock ones they turned out looking like the $100 option ones.

  • avatar
    Jeff S

    I doubt vehicles will last as long in the future due to more electrical nannies, cheaper components, CVTs, and small turbo engines. Many will be forced to keep their vehicles for shorter periods of time due to more expensive repairs. There will likely be more leases and fewer inexpensive used vehicles available for those who cannot afford newer.

  • avatar
    redgolf

    “There will likely be more leases and fewer inexpensive used vehicles available for those who cannot afford newer.”
    When you have “more leases” after the leases are up you then have more inexpensive used vehicles available, car dealers and used car dealers love leases, they keep things moving, plus those recent off lease vehicles eventually become older and inexpensive to own! It’s called depreciation!

  • avatar
    redgolf

    I meant to say “inexpensive to buy”, not necessarily to own, because of costly repairs and upkeep on used vehicles!

  • avatar
    Jeff S

    True unless there is more demand for late model vehicles and then those lease returned vehicles can be just as expensive. I know all about depreciation since I keep my vehicles at least 10 year (99 S-10 20 1/2 years, 77 Monte Carlo 18 years, 77 Honda Accord 17 years, 85 Mitsubishi Mighty Max 14 years, and 2000 Taurus 13 years). I doubt most of today’s new vehicles will last as long as those unless they are hardly driven. There will be less older cheaper vehicles which will force many of those buyers to buy newer used vehicles. Some vehicles like Honda and Toyota do not depreciate as much and many times it is better to buy new. Many pickups and crossovers have lower depreciation rate.

    Many of today’s new vehicles might become more expensive to maintain as they get older with aging electronics. Also a fender bender might cause more vehicles to get totaled by insurance companies because it is less expensive to total than to repair.

  • avatar
    redgolf

    I had a 94 Saturn wagon, 95,96,98 Sonoma, 97 Pontiac GP, 03 Silverado all purchased new, leased a 14 Cruze, 16 Encore, now 20 Equinox, the only one I kept and still drive is the 97 GP (179+ k miles), the one I wished I would have kept was the 03 Silverado sold it 2 years ago ( 187 k miles), besides my 69 Camaro bought it new and sold it after 5 years ( 61 k miles) to buy my used 72 Buick Limited with 27k miles on it that I kept for 10 years ( sold at 99+ k miles) and life moves on! ;-) I also bought a used 77 Ford Club Wagon that I kept for 13 years then gave it to my son.

  • avatar
    Jeff S

    I recently gave my nephew my 99 S-10 with 2.2 5 speed manual with 120k miles which still runs and looks like new. I bought my neighbor’s 2012 Buick Lacrosse with 45k miles for a very low price and plan on keeping it for 10 years. I have a 2008 Isuzu I-370 4×4 crew cab (same as Colorado/Canyon) and a 2013 Honda CRV AWD both bought new with low miles.

  • avatar
    SaulTigh

    I’ve actually come around to the notion that more people should consider buying new. It feels like the 2-3 year old proverbial used car is very expensive these days, and so most people are likely to still have a significant loan, and yet won’t have much warranty period left and the vehicle will start to need maintenance and such while you’re still in the middle of paying it off.

    Colleague of mine had the engine blow on his daily driver after 20 years and 300,000 miles of ownership. Went out and bought a 2 year old Santa Fe with 30k miles for $20,000. Local dealership had dozens of brand new Santa Fe’s advertised for $25,000. I know better than to say anything, but I know what I would have done. Over a 60 month loan at 4.77%, that’s less than a $100 difference, and this guy has great credit and a good job.

    • 0 avatar
      dal20402

      Agreed. It depends on the exact car, but there are many cars in today’s market for which buying new—especially where there is subsidized captive financing—is cheaper than buying slightly used.

      Even at lower budget levels, looking around for exceptional lease deals can often get you into a new car for three years for a staggeringly low cost over that time.

  • avatar
    Jeff S

    Agree as well much easier with good credit to finance a new vehicle and for just 5k more have a new vehicle instead of a 2 year old vehicle this is especially true of many Toyotas and Hondas where for a couple of grand more you can buy new and get a full warranty.

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