It’s more than clear that the wealthiest people in America are feeling good about the current administration and their own financial futures.
One of the ways this attitude can be gauged is by how the ultrahigh net worth spend their money. If fine art, real estate and luxury car purchases are on the rise, the “wealth effect” is in full force.
Luxury Car Purchases Sky Rocket Post-Election
According to The Wall Street Journal, sales of Bentleys, Ferraris, Maseratis, Porsches and Rolls-Royces have increased by 18 percent year over year since the November election.
Because the number of these vehicles in production is always relatively low when compared to other areas of the car market, large gains can be made with few additional purchases, but growth still spells great success for the automakers that build high-end luxury autos.
Rolls-Royce, for example, has seen a 42 percent increase in sales between November 2016 and January 2017, while auto sales of more average cars remained flat for the same period. January tends to be a slow month for luxury auto sales, but Lamborghini reported a 15 percent year over year gain for the month. These cars, which easily exceed $250,000 to buy outright, are purchases that are often delayed when the economy is less certain.
“It’s not that our customers didn’t have the money before, but you don’t want to indulge when you’re laying off employees,” Pedro Mota, president of Rolls-Royce’s North American operation explained in an interview with The Wall Street Journal.
Attractive Lease Options, Too
But there’s also another reason for a bump in revenue for luxury auto manufacturers: attractive lease options. For example, Jaguar is offering 1.9 percent financing on some of their 2017 models, as well as a $609/month lease on its F-Type Coupes. The 2017 Maserati Quattroporte S has been offered for $788 on a three-year lease. Even Rolls-Royce is getting into the game with a $1,795 per month lease on its Wraith.
Although it’s good times right now for luxury car manufacturers, some luxury car market experts see dark days ahead. Like other types of goods, luxury cars aren’t immune to bubbles. With so many more luxury cars on the road due to cheap leases, it’s a good bet that prices will plummet when those same cars are returned to the dealer.