Data from the Power Information Network shows that an increasing number of owners of top-of-the-line luxury cars are trading in their high-priced vehicles for entry-level luxury cars and even switching to bigger, pricier compact and midsize cars from non-luxury brands, according the USA Today.
The trend has followed the increase in gas prices as a result of Hurricane Katrina, which saw gas prices soar to more than $3 a gallon. Despite the fact that gas prices have gone down to more than $2 a gallon, many luxury car owners are still feeling the pinch because luxury cars often require premium.
Art Spinella, president of CNW Marketing Research says that another reason for the step down is because many consumers who drive high-end luxury cars are growing fonder of smaller cars because they don’t want to be seen in a large luxury car that reminds them of the boat their grandfather used to drive.
Overall sales of luxury cars are up, however, because of the increase in sales of smaller models. According to Autodata numbers, sales of entry-level cars were up seven percent in October, with midlevel luxury cars rising 1.2 percent. But sales of high-end luxury cars were down 10.6 percent.