What does a luxury car even mean these days?

New cars are more expensive than ever, with average prices in the U.S. exceeding $50,000 for the first time in September, up 3.6% from 2024, according to auto research company Kelley Blue Book. Luxury cars are pushing that growth, according to KBB. The average price of a vehicle from Porsche is $115,407, the highest of any standard-production automaker. A Ferrari, on average, costs four times that amount. But luxury is slippery to define when you can spend $42,000 on a Mercedes-Benz or $114,000 on a Ford pickup truck. In a world of tailored cashmere socks and gold-plated toothbrushes marketed as luxury experiences, the term has become so ubiquitous, it has almost lost all meaning. For cars, there’s no correlation between luxury and price; it’s not strictly about sheer horsepower or loads of carbon fiber. So I spoke with executives at brands including Bentley, Bugatti, BMW, Pagani and Rolls-Royce to hear how they define luxury in the modern age. What became clear is that it encompasses more than former glory, as once-prestigious brands like Maserati descend into poor resale values and Jaguar remains comatose. It’s more than expensive materials, too, since advanced software often confers more status than fancy trim or carpeting. And it’s not necessarily outré design, even if quiet luxury is already a thing of the past. Instead, car manufacturers are working hard to create tight-knit communities among their buyers and collectors, catering to their personal preferences and needs during every interaction and developing increasingly advanced ways to customize vehicles to reflect customers’ exact personal taste. For many car buyers, luxury is about the one thing you can’t buy: minutes on the clock. “Luxury is how we deal with your time,” says Adrian van Hooydonk, design director of BMW Group. It’s “the automaker being respectful of people’s time, and we want to make sure that the time spent in our product is rewarding.” Others say luxury is about providing casual access to company leadership and craftspeople, allowing a familiarity that makes customers feel welcome whenever they’re on-site. “We talk to them all the time,” says Christopher Pagani, head of marketing at Pagani and son of the founder. (It’s admittedly easier for the ultra-high-end automakers to stay in touch with customers. Pagani has made roughly 600 cars since Horacio Pagani opened up shop in 1992.) The power of community and controlled desire The connection extends to potential clients. Ferrari wrote the blueprint on how to generate more admirers than owners, keeping production limited and making existing customers wait years for the privilege of buying a special model. Porsche has reached for that status as well, generating heat around its most anticipated models, which command three times their sticker prices at dealerships in the most aggressive markets. This aspect of luxury is all about fostering enthusiasm, passion and aspiration, says Frank-Steffen Walliser, chairman and CEO of Bentley Motors. The exclusivity can be enjoyed even from afar, via the pleasure that comes from observing such a prized object or buying adjacent goods like books, watches and clothing. It’s an entire universe that many covet and only a few may enter. “We need fans,” says Walliser. “It’s true for every brand. [Clients] need to be admired for the choices they’ve made.” Heritage, storytelling, and the emotional pull of legacy brands Indeed, leaning into a lineage of celebrated owners, wild adventures and successful feats parlays the allure of a brand. As with France’s oldest luxury houses like Hermès and Goyard, the most prestigious car brands are vibrantly relevant today even as they proudly count many decades of history in their archives, which reinforces their raison d'être and captivates both new audiences and devoted enthusiasts. “Luxury brands are about storytelling,” says Rawdon Glover, managing director of Jaguar, who is working to revitalize the nearly century-old brand, with new vehicles expected in 2026. “You buy a luxury car because you want it, not because you need it, so we’ve got to create that irrational desire.” This is where established auto brands dominate start-up electric vehicle companies. Despite the altruistic bent of their marketing and the seemingly frictionless acceleration of their cars, EV upstarts lack the depth of institutional memory. Tesla delivered its first vehicle in 2008; Lucid and Rivian did in 2021. Aston Martin, Bentley, BMW, Bugatti, Mercedes-Benz and Rolls-Royce are each over 100 years old. Ferrari and Porsche are both more than 75 years old. A rich heritage emphasizes the origin story of a car’s seductive curves or sleek athleticism. It also accentuates the high-quality materials and handmade elements that may dress it in rare woods, supple leathers, shearling floor mats or exquisite carbon fiber. Master craftsmanship achieves the dual aims of lending tactile and visual reassurance that the product is well-made and separates it from others made more cheaply. Innovation can help a younger brand overcome a lack of lineage. Sweden’s Koenigsegg Automotive is just over 30 years old but curates a rabid fan and ownership base with extreme engineering that propels its million-dollar supercars to record-setting feats. Italy’s Pagani has cultivated collectors obsessed with its pioneering use of active aero flaps and development of novel composite materials like carbon-titanium. At BMW, innovation is woven into an already well-established narrative that says the owner must feel at home in the car. It’s a delicate balance, says van Hooydonk, so the company offers anyone inside the car the freedom to choose when they want to access technology or not. It hides some speakers, buttons and sensors behind natural materials like wood or fabric, with the tech becoming active only upon user interaction. “If they’re going to spend this much money on a car, they want it to be at the cutting edge,” he says. “At the same time, they don't want that technology to be in their face all the time. That’s why we call it shy tech. The technology is there when you need it, but it’s not overpowering.” Customization as the ultimate status symbol For the überwealthy, innovation extends far beyond incorporating artificial intelligence into the car with help from Google. Transformational techniques to make the car feel unique are essential, since authentic luxury reflects the buyer’s deepest sense of identity. The car must feel meaningful on a personal, even private, level. “The clear trend that we can see is that there’s growing demand for clients to create things which are special and specific to them,” says Chris Brownridge, CEO of Rolls-Royce. “Sometimes it’ll be celebrating a relationship, or a family member or their dog. It could be a public achievement, or something personal, which nobody else knows about.” All the new Phantoms that Rolls-Royce sells are heavily customized, the company says, which pushes pricing on the company’s flagship sedan well past its roughly $500,000 base price, often doubling or tripling it. Special commissions, like the Phantom Syntopia, created with Dutch fashion designer Iris van Herpen, are worth many times that amount. The vision for the Syntopia was to emulate the beauty of fluid motion. Artisans created a special one-off liquid iridescent exterior paint and overlaid it with a mirror-like pigment to mimic deep waves. They developed silk-blend textiles that look like the face of water at night and created a ceiling headliner made from a single flawless hide arrayed with nearly 1,000 sparkling fiberoptic lights and 162 petals of glass organza applied by van Herpen’s own couture team. The project took four years from its start to completion in 2023. After the debut, it disappeared from public view into the private collection of the owner, the embodiment of ultimate luxury in the modern world — understanding why something you own is special, even if no one else can see it. By Hannah Elliott

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What does a luxury car even mean these days?