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Simple answer is: they are luxury cars.

Safety - at least in Europe you do not really get unsafe cars. Too much competition. Not getting full stars gets you kicked in the a** by consumers.

Fuel Economy? Hate to tell you but the 3 liter engine in my SUV eats more fuel than the small engine in a lower end car (currently average this year 8.4 liter diesel per 100km). Not maybe a lot, but you do not spend 120k USD on a brand new car to make money back on fuel. This just does not work.

Insurance cheaper? Dream on. I have a full coverage and the coverage for a 120k USD car is a LOT bigger than fora 20k low end thingy. You do not want to see the yearly insurance premium for my sports coupe. It costs more than most cars on the road. So, no saving, sorry.

Maintenance? Okay, I got 5 year all maintenance work included in the price, but still - new braking discs stopping any of my cars cost more than for low end cars. Comes with weight or high end braking systems. Same with dampeners. Yeah, sorry - you know, adaptive suspension comes with a price. Running costs pretty much scale with purchase price.

Why buy it?

• Luxury and Technology. More comfortable, all nicely integrated.


• Style and image. Running a company - successful - sort of also implies you show the signs of success.


• Performance. Seriously, none of the cars I am driving on a daily basis has less than 312 horse powers. It is amazing to just hit the gas and things WORK. And VW Golf just does not have the same - emotion.

Generally you buy them because of the quality of the ride. Because the engineering is amazing and you can feel it. You do NOT buy them to save money or if you can not afford them. And if you can afford them, you may buy more than one ;)

If you look for financial sense - no, none there. Same as in owning a helicopter, or same as buying a yacht. Luxury cars are toys for people that can or have to afford them. They are right there in the same category - but a slightly higher price tag - than i.e. tailor made clothing.

Seriously, being a successful business owner with earnings that make you WELL off - is not compatible with driving a 10 year old lower end car, and if you can then deduct the costs from the business side.... people ask questions if you do not have a modern higher end car. Yes, some people can play the "hermit genius" card, but if you meet managers for negotiations then signs of success are part of the game.

Same if you are a top lawyer. Yes, there is a place for the "humble living millionaire" but - some people project a live and play hard image, and luxury cars just are a lifestyle choice.

But financial sense? NOPE. Same as living in a large house, making expensive holidays and such.

To answer your questions: No, safety, ride quality, etc., are pretty much the same when comparing Honda/Acura, Toyota/Lexus, Chevy/Buick etc. like models and features. You can certainly save money by getting the non-luxury badging.

Generally, you can't justify the extra price for a luxury car unless you place value on non-tangibles like how it makes you feel or if you really like any of the interior upgrades. When comparing cars that are the same platform with different badging, like Chevy Traverse/Buick Enclave, the amount of value assigned to brand perceptions becomes even more apparent. Sure, there are always some differences in the details, but overall, these cars perform the same.

A fully loaded Toyota Avalon, for example, is a Lexus ES in all but badging and minor interior details. People still want the Lexus, though, because of the perceived value in the brand name.

There are many good answers here, but most are missing the point.

Luxury cars generally have more stringent QA and better dealer service, which are very tangible to those who need a dependable vehicle. This adds to the cost of the vehicle, which is where the prestige aspect comes from. The better standard equipment is not the deciding factor, as most of that equipment is available on the standard brand models as well.

Toyota famously has terrific build quality and QA, but their premium brand Lexus was the first brand to upseat Mercedes in the "dealer visits per kilometers driven" metric, for the vehicles first 100,000 kilometers, since the second world war.

To actually and simply answer your questions,

We have both Lexus LS and Toyota Avalon.

The Lexus LS is (without a doubt, there's no comparison) the best engineered, best in every way luxury car. (So, it's far better than the S class, 7 series etc.)

The Avalon is (almost certainly) the best engineered, best in every way "top non-luxury-class" large sedan.

So to compare the two,

Is ride quality is better?

Yes, the ride quality in an Avalon is amazing.

But the ride quality in an LS is other-worldly.

Recall too that the LS is, simply, the world's quietest car.

Is it safer?

In the case of LS v. Avalon, the LS is safer simply because it's a bit bigger/heavier.

Does it save money in the long run?

It costs incredibly more to run an LS than to run an Avalon. An LS is astonishingly rugged and reliable but when something breaks or wears out, it's the most complex existing system in vehicles, other than supercars.

What else?

The Avalon is amazing "in its own way" - if you have an LS and then get an Avalon, the Avalon is much lighter, "streamlined" feeling. Both are incredible in their own way. An LS is like owning an amazing mansion and the Avalon is like owning an amazing beach house.

But in answer to your question, yes, for sure, the LS is (even more) amazingly comfortable, "luxurious", smooth, quiet, etc.

(A Lexus LS is far, far quieter and smoother than super-luxury cars that cost absurd money - Bentleys, Maybach and the like.)

BTW just in case anyone thinks I waste money on cars! ...

...because I'm "money SE moneywise" we only ever buy used cars, a couple years old, to save massive amounts of money. Never buy a brand-new car. (If you happen to live in the UK, which indeed has ridiculously cheap used cars in general, the LS happens to be one of the very highest depreciating cars; so it's an astounding bargain for that type of vehicle.)

Generally, luxury cars usually have better interiors and more equipment that come standard compared to "regular" brands. Possibly the suspension would be tuned for a softer ride. That would about it really. Dealer service plans may also be more comprehensive, but there's a lot of variations in that.

The main selling point in luxury cars would be the badge prestige factor. You're just not going to impress people who care about brands with your top-of-the-line Camry, no matter how equal (or even better) it is to a low end Lexus.

One difference that I'm only seeing touched on in other answers is, there are usually a lot of options, add-ons or features that aren't available in the lower end versions. Sometimes they're things that won't make a difference to you, sometimes they're things that will.

Some examples drawn from our car buying history - the difference between basic and luxury models cars can include options like leather seats, specific colors or interior finishes (aesthetic differences), luxury add-ons like a sunroof, heated seats, entertainment options (what gets played and how easily, ie cassette vs cd vs usb or bluetooth access), and functional add-ons like integrated gps, backup cam, blind spot or lane or slow-down warnings, things like that. Or even something like stick shift vs automatic, though that was reversed (only available in basic and not in higher models).

Someone might find one or more of these features tip the balance of what they're willing to pay - especially since many of the last category can make a big difference in driving ease or safety, the various warnings or backup cam might make one safer or a less anxious driver, gps might be easier to use or navigate with, etc. For some people the luxury or aesthetic options might tip the scales - they must have heated seats, or really, really need that sunroof, it can be about accessibility or intended use or just, they wanted it. Some options clearly make more sense to me than others, but I know that the value of many things is dependent on circumstances.

As a side note, this is from sales pitches in our history, so it includes some things that were rare/expensive to be luxury-model-exclusive at one point, but later became much more widely available or even obsolete (example, cassette then vs blutooth now, phone gps's now vs first inbuilt gps's years ago).

When buying a luxury car, you should be prepared to spend a sizeable chunk of money on brand image. It may be better quality, higher performance etc., but when you translate those in monetary value, there will be still a gap between a Toyota and a Lexus which is due to brand image alone. Same as buying a Louis Vuitton bag or a Versace costume: those things are also well-made, comfortable and quite durable, but those properties alone absolutely don't justify the price.

Advantages?

They are better cars. You can definitely feel the difference in performance.

• horsepower: that comes in handy for stuff like overtaking a slower vehicle, getting away from a bad driver, merging into highway traffic, etc.


• Turning radius: Even though the luxury vehicles are larger, they often have superior turning radius.


• Safety: better safety features. The cars are simply bigger, made of better material, and have a larger crumble zone.


• Comfort: the european luxury cars in particular, have GREAT seats, that never seem to wear out. And yes, everything just feels nicer....

And there are other intangibles too.

People JUDGE.... So you want to have a decent car..

Clients judge... if you are in a profession where you meet individual clients, a good car inspires confidence. But don't go overboard. A hyper luxury car inspires suspicion.. Imagine your lawyer showing up in a limited edition Ferrari. So it is better to just go with a 5 or 7 series BMW... On the other end of the scale...a heart surgeon that drives a 1980 Honda would probably scare away most of his potential patients.

Ultimately, it depends on what matters most to you. The first thing you need to pay attention to is budget. What can you reasonably afford? This is not just the upfront cost of down payment and/or financing. That's the start.

Insurance

Insurance can vary wildly between vehicles, and sometimes it can seem a bit nonsensical. Insurance premiums on vehicles are dependent on what the vehicle is intended to do, who usually buys them, and the cost to replace. Newer luxury vehicles have a higher cost of replacement, so your premium may be higher, but there are lots of factors here (including you as a driver) that drive the price.

Maintenance

Maintenance is another big issue. Luxury cars usually cost more to run and service. They often come with larger engines that take more oil, larger/higher-performance parts such as tires and brakes, and the service department may or may not charge a higher hourly rate, it depends on where you take your vehicle or if you do maintenance yourself.

Long Term Ownership

Furthermore, luxury vehicles tend to come with more standard equipment such as sensors for parking, upgraded infotainment, electronic park brakes etc. These are things to look at if you are looking to keep the vehicle long term. As an example, certain vehicles come with air suspension rather than conventional springs and dampers, which may give fantastic ride quality, but the cost to replace may exceed $5k (USD) in parts alone, whereas conventional springs and dampers may be less than half in parts.

Depreciation

Depreciation is a huge cost that is often overlooked. Luxury brands face a steeper depreciation curve that you need to think about, especially when financing. If your payment doesn't keep up with depreciation, you are better off looking somewhere else. You might be able to catch it, but if something happens, you can wind up underwater quite quickly, and it could cost you to sell or write-off the vehicle.
However, you can take advantage of the steep depreciation curve when looking to buy used/CPO to get a lot more car for the money, if that's how you want to look at it. Buying ~3 years after new is usually the sweet spot for lower depreciation and still new enough to minimize ownership costs.

Benefits

Luxury vehicles are great, and often the benefits you get out of them are build quality, quality of materials, solidity, isolation from the road, performance, etc. These qualities are usually subjective drivers for why people may prefer a luxury brand over a standard brand. From a practical perspective, there isn't much reason to buy a Lexus ES 350 over a Toyota Camry, because they are functionally identical. However, the Lexus has more prestige, along with a more aggressively tuned engine, nicer materials, and better road isolation than its Toyota counterpart. And when you go to sell, an ES 350 on the used market will also tend to fetch a premium over a Camry with similar miles and year. (I used these two vehicles as an example because OP mentioned Toyota/Lexus specifically and they share the same architecture)

Again, it's completely up to you. Come up with a solid budget, look at cost to own, depreciation, and insurance. Make sure you have sufficient wiggle room so that you aren't stuck in case something breaks, and make the decision that fits you best.

I have several posts on what might be called notable-cars. But these notable-cars are more ordinary than sports-cars and therefor they are sedans or coupes.

These notable sedans and coupes are cars with rear-wheel-drive and 2.0 turbocharged engines. And then V6 engines are usually also available however the V6 engine increases weight.

The problem with front-wheel-drive is engine placement. The engine is in front of the front wheels instead of mostly behind the front wheels. With the engine weight hung off the front of the car then the car tends to plow instead of turn. Or if the car had weight hung off both the front and rear then the car would tend to be like a flywheel in handling response. But with most of the weight on the front wheels then the rear suspension might be too soft to stand up to the weight transfer of acceleration.

Cars are well known to be better handling with the weight of the car more inward towards the longitudinal center.

Now cars with rear-wheel-drive are more expensive to manufacture and therefor more expensive to buy.

But there is another type of notable cars and those are cars with extra-ordinary chassis construction. These cars have a separate frame and bodywork and usually a non-metal bodywork. The strength of the frame is put where it is needed and the bodywork saves weight where strength is not needed. Cars that claim to be better because of so-called monocoque chassis construction usually fail to differentiate between effective stressed-skins and ineffective stressed-skins. For instance an aircraft fuselage has an effective stressed-skin while the rear fender of a car bridging space is not an effective stressed-skin.

Now cars with extra-ordinary chassis construction are more expensive than uni-body cars. A uni-body car can claim to be monocoque construction but it is not likely to have an effective stressed-skin as it is designed just to be easy to manufacture.

And so overall, a more expensive car can have significance in fundamental design.

If your success at work depends on the level of wealth that you prominently display to others, then purchasing a luxury car brand could be a wise financial investment. If your clients value you less for driving a Prius than driving a Tesla, see if the price difference between a Prius and a Telsa is likely to generate you enough new business to make the investment worth it.

I'm a car guy. Have been an Industrial Designer for more years than I care to admit here. Not only read detailed car specs, but understand exactly what they all mean, even the arcane ones. I go to every car show within my viewing area and ask the presenters dozens of questions. Have been to F1 and Indy car races and follow engine developments. I have high speed, winter and safety driving class course credits. I've owned a number of vehicles in the car class the original questioner cited and the only responder who touched on the answer that I'd like to provide is "S Spring". If you're only interested in the differences between the Japanese luxury knock-offs of their own brands (as you asked), like luxury appointments, construction quality (sound-proofing, ride comfort, safety ratings) and maybe drive train power and handling upgrades (like available automatic AWD) over and above their own base models, then the responders who cited those lists are exactly correct. If those differences are important to you then there is value for the price paid.

However, if the true intent of your question is to ask if luxury cars exceeding say, $40k as a base example, are really worth the price paid, I would steer you to any number of MUCH better vehicles that are renowned global brands unto themselves, without being upgraded Japanese knock-offs. There are excellent reasons why Mercedes is currently dominating F1 racing. There are time-honored reasons why Audi dominated road course and endurance racing for so long. There are excellent reasons why so many wealthy Asians, in spite of their local luxury monikers, choose to drive BMWs. There are great reasons why Jaguar finds itself atop many Best in Class lists and recently won a Car of the Year Award for its current electric vehicle, E-Pace (yes, Jag, not Tesla), if your into that. In my opinion, the luxury upgrade brands of Honda, Nissan and Toyota were created for a technologically uninformed American who has been given the impression via a PR campaign and gives off the impression that they've gotten their money's worth from a vehicle that costs about the same as a European Luxury car, which usually provide much more value and features for the price paid. In closing, I've driven both, but no vehicle I've ever driven has given me that heart pounding smile that I beamed when I closed the door on my first German luxury sports car and went for a drive on a winding road. I actually said to myself out loud, "Now I know why wealthy people buy these."