Source: Forbes
The rich are different ‒ or so we’re told ‒ which is probably why organisers of the upcoming North American International Auto Show in Detroit have moved the most luxurious vehicles out of the city’s run-down convention centre (where they’d be forced to mingle with Chevys, Fords and Toyotas) and into a swank casino hotel about a mile away.
The invitation-only Gallery at the MGM Grand, now in its fifth year, is an exclusive opportunity for wealthy car buyers to shop for uber-luxury and performance vehicles away from the riffraff who pack into the car show each January by paying the US$12-admittance fee. Instead, invited Gallery guests get to dine on Wolfgang Puck delicacies while checking out vehicles from Aston Martin, Bentley, Rolls-Royce and Jaguar, among others. Many of the vehicles on display at The Gallery won’t even appear at Cobo Centre.
But with so much hullabaloo over the widening income gap between rich and poor, the question is whether rich people really prefer different cars than the rest of us. The first challenge was figuring out who exactly is “rich.” The Occupy Wall Street movement claimed to represent the bottom 99 per cent of the population. The remaining 1 per cent, according to the Internal Revenue Service, earns US$506,000 or more. President Obama, meanwhile, has set the dividing line at US$250,000. Under US$250,000, you’re middle class; anything over US$250,000 and you’re wealthy so you should pay higher taxes. Only 2 per cent of households in the US make more than US$250,000, according to the IRS, so that seemed like a decent cutoff.
Researchers at Experian Automotive, a unit of the well-known credit information service, were asked to dig into their database of more than 600 million vehicles in the United States and Canada for insights.
Experian looked to see which brands were favoured by people in three different income groups: US$250,000 or above; US$100,000 to US$249,000, and less than US$100,000. Not surprisingly, the richest people were the most likely to buy luxury brands (39 per cent for people with household income above US$250,000 compared with 8 per cent for people who earn less than US$100,000 a year).
But what that also meant was that 61 per cent of people who earn US$250,000 or more aren’t buying luxury brands at all. They’re buying the same Toyotas, Hondas and Fords as everyone else. So what cars are preferred by the rich?
Luxury models led the list of the 10 most popular cars for people earning over US$250,000: The Mercedes E-class, Lexus RX 350, BMW 5 Series and 3 Series had the top four spots. But most surprising are the cars that rounded out the top 10: Three Hondas, a Toyota, an Acura and a Volkswagen. Not a single domestic vehicle in the bunch, though Cadillac has at least grown in popularity among the rich for the past two years.
Maybe the Honda Odyssey is the preferred minivan for nannies of rich people. And perhaps the Toyota Prius in their driveway is a different kind of status symbol. Even when it comes to humble compact cars, German engineering is favoured, which probably explains the popularity of the VW Jetta among the rich crowd.
Maybe the rich aren’t that different after all.
