Automakers are upgrading lineups to meet the demand for high-end options

Premium car sales have increased 36% over the past five years

‘Every new car is a luxury purchase’

Part of the problem is that more Americans want expensive SUVs and pickups with all options, he added, which can cost as much as 40% more than base price.

Over the past decade, luxury buyers have proven time and time again that they are willing to spend more on luxury cars and the associated financing.

Even the smallest upgrades have received huge demand, Drury said, citing the extreme enthusiasm over the Honda Odyssey’s built-in vacuum option when it was first introduced in 2014.

Different packages or trim levels offer a range of features designed to appeal to different buyers, such as improved safety features, larger engines, or high-end finishes such as leather seats and a better stereo.

Now everyone wants high-tech touchscreens, mood lighting, 360-degree cameras and heated and cooled seats, Drury said, which cost even more. “Fewer and fewer people want something basic.”

With the lucrative luxury segment in high demand, automakers are upgrading their lineups and scaling back on lower-priced cars.

“Basic models, while attractive in theory, rarely hit the streets,” Drury said. “Any new car is a luxury purchase right now.”

“Who do you blame: the consumer who buys up these options, the dealers who order these cars, or car manufacturers who produce fewer base models?” he said.

As more people are priced out of the market for new cars, automakers could start testing cheaper alternatives, he said, although if there’s a lot of consumer interest, it could drive up the price for those models as well.

For now, the best way to get a base-model vehicle is to order it directly through a dealer, Drury advised.

“There could be a great replacement for about half the cost,” he said.

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