How To Afford A Luxury Car Without Breaking The Bank

Reading Time: 7 minutes

Don’t waste money on a luxury car!”

No doubt these cars look amazing. And they’re guaranteed to get heads turning your way. But for the majority of us, these cars are but a dream.

Without counting our already exorbitant COE prices, throwing in the starting prices of a luxury brand like Mercedes, BMW, Rolls-Royce and now Tesla… taking on a hefty loan would break our bank account…

Or would it?

How Much Should You Make to Buy a Luxury Car?

First, let’s take a look at how much some of these cars would cost us.

If you’re looking to buy a new a180 Mercedes or BMW 318i, according to Dollars and Sense, you should be earning at least $80,000 per annum.

If you’re just looking for an old-school luxury ride like the Rolls Royce, according to Seedly, the expected monthly instalment works out to $16,494. Yes, that’s a 5-figures monthly loan payment. Using only one-third of the salary for car loan repayments would bring the necessary monthly income to the “affordable” sum of just $98,965.86!

All kidding aside, it’s no wonder that these cars are the ultimate symbol of wealth and success. Only a multi-millionaire could afford these expensive toys.

For us average mortals, we need to seriously stretch our budget and that probably still isn’t enough.

That said, if you’re earning less than the average annual income required, the good news is, there might still be a way for you to drive a “luxury” car.

Because for the eager car enthusiasts there are several ways to get a “good deal” on your next luxury car purchase. And a few other ways to even get them at a steal.

You will, however, have to be willing to take on some personal responsibility and put in the time it takes to find such deals.

How to Afford a Luxury Car on a (Much) Lower Salary?

To start with, you don’t need to be earning a million dollars a year to afford a luxury car. You do, however, have to know what your personal limitations are.

There are many different types of luxury cars available with a wide range of prices.

The first thing you want to do is have a clear target of the car you want to own and how much you can comfortably set aside every month.

Next, it’s all about setting aside enough savings for the down payment. If the brand you’re considering is still out of your budget, there’s no shame in going for a less popular brand. Those cars may not have the same prestige as the “atas” brands, but they’re still luxury cars.

If at this point, it still seems unreachable, then the good news is, we still have a few more “tricks” to help you achieve your luxury car dream.

Read on to discover them for yourself.

#1: First Things First, Don’t Ever Break the Bank for a Car

We think that this is obvious, but it’s best that we still put it out.

Unless you’re using a car as a cash-generating asset such as for ferrying clients or going for important appointments, most cars are depreciating assets. New cars depreciate quickly which means that by the time you get around to selling it (if ever), it’ll probably be worth far less than what you paid for it (if anything).

Hence, a better idea for most people would be purchasing a used car.

There are a few reasons for this.

Firstly, new cars lose around 20% of their value the moment you drive them off the lot. Secondly, and most importantly, if you purchase a used car – even an expensive one – it will still be cheaper in the long term than buying a new one. How? Cars are designed to last for upwards of 10 years nowadays, but the depreciation curve is much more gradual for used cars than it is for new ones (reference).

In fact, after 3 years a used luxury car will only be worth around 65% of its original price, while a new car will have lost almost 90% of its value.

So not only do you get all the enjoyment that comes with owning a luxury car (ahem… supercar), you also get to feel guilt-free without breaking the bank.

#2: Do Your Research and Shop Around

Although we could tell you to go ahead and visit our listings, we’ll assume that you’re not just going to take our word for it and want to do your own extensive research first.

For obvious reasons, we’re not going to list our competitors’ websites here. However, it’s always a good idea to do your research and find out exactly how much existing car owners are willing to let go of their cars.

Information is key here.

By understanding why an existing car owner is selling, you can use it to your advantage. Especially since the next thing we want to do is…

#3: Negotiate with the Seller

Assuming you’ve found a seller who is willing to negotiate (which is almost always the case), this is your opportunity to get the car at an even better price. And remember, luxury cars hold their value much better than regular cars so there’s definitely room for negotiation.

Some tips for effective negotiations:

  • Be polite but firm and don’t get pushed around
  • Keep offers and counteroffers concise and clear
  • And finally, it’s all about the “soft” skill and building good rapport. For instance, don’t overstay your welcome at the seller’s house

#4: Get a Car Loan, But Have an Exit Strategy in Mind

A credit score is something you might have heard of before. By now you should know that it’s very important to have a high credit score to buy cars, especially much more expensive ones.

If you’ve done your research well then hopefully by now you’ll already have a decent idea of how much you can afford for monthly repayments. If not, it’s always a good idea to work out your finances and determine what’s your affordable monthly threshold.

The worst thing you can ever do is to overextend yourself on a loan. Instead, by first working out your maximum monthly loan amount, you’ll have a clearer idea of the cars that will fall within your comfortable range.

But if taking up a loan still isn’t a feasible strategy, then fret not as there is still another way to drive a luxury car in Singapore.

#5: Why Not Lease Your Next Luxury Car Instead?

Leasing is where you pay monthly instalments to the dealer in order to use their car for a predetermined amount of time.

Why would you do this?

Basically, because it’s the only way to get access to cars you might not otherwise be able to afford if they were bought outright.

However… make sure that at the end of the lease period you return the car or purchase it from the dealer by making all remaining payments. If not, you might expect a hefty fine and legal action from the local authorities.

There are numerous other benefits to leasing:

  • You’re always driving a new car with the latest features and technologies
  • Maintenance and servicing is usually covered by the dealer
  • There’s no need to worry about depreciation costs

All in all, leasing can be a very cost-effective way to drive your dream luxury car. Just make sure your budget can accommodate monthly instalments.

Which Type of Car Is Right For You?

There are basically 2 types of luxury cars.

The first is the car you’ll buy outright, which means that at the end of your lease period you just return it to the dealer and you’re done.

The second involves buying a pre-owned vehicle after your lease term ends.

The best type for you will depend upon how much disposable income you have every month as well as other expenses like children, pets or even a wedding – things that can drain an already thin wallet very quickly.

It also depends on how much risk you’re willing to take (though since luxury cars hold their value well it’s actually not all that risky).

But if you’re relatively young or single and have a stable job on top of low monthly expenses, then it’s probably best to buy a pre-owned luxury car from a dealership after your lease term is up.

In the end… It all boils down to how much money you have at hand and what type of lifestyle you lead.

Use the tips above to save more money on your next car purchase, whether it be a luxury car or not.


If you’re in the market for a luxury vehicle, then it’s good to know that there are many different types of car loans.

Some might be better suited than others depending on your personal situation and preferences, so make sure to do some thorough research before committing to one type over another.

One way is through lease agreements with dealerships; this will allow you access to more expensive cars without breaking the bank every month because leasing comes with its own set of benefits like low monthly payments and maintenance costs covered by the dealer.

You’ll also get used to new features and technologies as well as never have to worry about depreciation rates since they’re not yours after all! Just remember that if you choose this option, at the end of your lease period you have to either purchase the car or return it. Otherwise, you might be looking at some hefty fines.

So make sure you’re financially ready for this commitment before signing on that dotted line!


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