Contrary to popular media hype, wealthy Americans do not spend wildly on luxury cars, opulent hotel rooms, or 4000 thread count sheets.
In ground breaking research on the definition of luxury and the spending habits of the wealthiest 10% of US households, respondents to a survey by the American Affluence Research Center were asked to specify the most they could imagine spending for 37 various products, including a new car.
Over 75% of those surveyed said the most they would spend is $50,000 for a new automobile. Toyota ranked #2 as the most popular brand to buy, ranking just behind Lexus and ahead of BMW and Mercedes Benz.
Surprised that the wealthiest Americans only want to spend less than $50,000 on a new car? Thought they were driving Ferraris and Maseratis? Clearly this isn’t Lifestyles of the Rich and Famous.
According to Ron Kurtz, President of the American Affluence Research Center, the people most likely to be living the really good life are the ones with a net worth of $6 million or more and an income of $500,000 or more. These are the “conspicuous consumers” who, according to Kurtz’s study, are most likely to spend more than $50,000 for a luxury automobile; the kind of car that you wouldn’t find in the Toyota showroom.
So what does all of this mean? According to Kurtz,” about 90% of the affluent are not conspicuous or ostentatious consumers. They spend conservatively and save carefully.” They choose not to spend more than $50,000 on a car, even though they have the funds. Kurtz believes it is these affluent consumers that represent “an opportunity to substantially increase the market for high end luxury products if the affluent can be educated about why they should consider buying them and the brands that offer them.”
Luxury brands take note. There’s market share to win if you can convince the average multi-millionaire that your product, brand, make, or model is worth the splurge.
The national survey included 552 affluent men and women with an average of $304,000 household income, $3.1 million average household net worth, and $1.2 million average value of their primary home.
Tags: Affluence Research, affluent market, BMW, Ferrari, high net worth, Lexus, Lifestyles of the Rich and Famous, luxury, luxury automobiles, luxury cars, luxury market, luxury motor vehicles, luxury research, Maserati, Mercedes, millionares, multi-millionaire, splurge, Toyota
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