The short answer
A luxury car commonly costs well over $70,000 to own across five years once you add depreciation, financing, insurance, premium fuel, maintenance, and taxes. Depreciation is the single largest piece — luxury models shed about 48% of value in five years versus roughly 37% for a mainstream car, per iSeeCars — often more than every other cost combined.
What costs make up the 5-year cost of a luxury car?
Six buckets make up the five-year cost: depreciation, financing and interest, insurance, fuel (often premium), maintenance and repairs, and taxes and fees. Depreciation dominates, typically running tens of thousands of dollars over five years, while the remaining buckets each add a few thousand and scale with the higher price, parts, and fuel grade of a premium badge.
| Cost bucket | Why it runs high on luxury |
|---|---|
| Depreciation | Largest cost; ~48% lost over 5 years vs ~37% mainstream |
| Financing & interest | Bigger loan balance means more total interest paid |
| Insurance | Higher value, costlier parts, advanced sensors |
| Fuel | Many models require premium 91-octane gas |
| Maintenance & repairs | Specialized parts and dealer labor; tighter schedules |
| Taxes & fees | Sales tax and registration scale with price |
This is the luxury version of the broader budget covered in the annual cost of car ownership. The categories are identical, but every line item runs higher on a premium badge — and the depreciation gap is what separates the two.
How much does depreciation add to luxury 5-year cost?
Depreciation usually adds the most of any bucket — typically tens of thousands of dollars over five years. Luxury cars lose about 48% of their value in that span versus roughly 37% for a mainstream model, per iSeeCars. On a $60,000 car that 48% drop is about $29,000 of value gone, far outweighing fuel, insurance, or maintenance.
- The first-year drop alone can erase 20% or more of the original price.
- Heavy leasing floods the used market and pushes premium prices down faster.
- Out-of-warranty repair fears and fast tech turnover deepen the slide.
Because it dwarfs the other buckets, slowing depreciation is the highest-leverage cost decision. See the full mechanics in why luxury cars depreciate faster, drawing on the iSeeCars cars-that-hold-their-value study.
How do BMW, Mercedes, Lexus, and Genesis compare on cost to own?
Lexus is the cheapest of the four to own, averaging about $551 a year in maintenance per RepairPal — below the all-vehicle average near $652 — while BMW (~$968), Mercedes-Benz (~$908), and Audi (~$987) run far higher. Genesis sits between, with strong value but a luxury depreciation curve. Lexus and Genesis hold resale better than the German marques.
| Brand | Avg. annual maintenance (RepairPal) | 5-year ownership note |
|---|---|---|
| Lexus | ~$551 | Cheapest luxury to maintain; strong resale |
| Genesis | Near non-luxury avg | Lower upkeep, but premium depreciation applies |
| Mercedes-Benz | ~$908 | Higher upkeep; German depreciation |
| BMW | ~$968 | Higher upkeep; flagships fall hardest |
One KBB five-year cost-to-own example shows how it stacks up: a 2026 Genesis GV70 totals well over $70,000 across five years, with depreciation the single biggest component at tens of thousands of dollars. Compare brand-by-brand upkeep in luxury car maintenance cost, which uses the same RepairPal figures, and check fuel grade in do luxury cars require premium gas.
Is a used luxury car cheaper to own than a new mainstream car?
A used luxury car often can be. It skips the steepest first-owner loss — the same drop that costs luxury owners about 48% over five years — so purchase-and-resale math can beat a new mainstream car. But premium gas, higher insurance, and out-of-warranty repairs near $900 to $1,000 a year can erase the savings.
- Depreciation favors used luxury: the first owner already ate the worst loss.
- Maintenance favors new mainstream: German upkeep runs well above the ~$652 average.
- Risk favors certified pre-owned: a CPO warranty caps the surprise-repair downside.
The deciding factor is repair risk after the original warranty ends. A certified program narrows the gap — see whether it pays off in is a CPO luxury car worth it, and run the broader trade-off in annual cost of car ownership.
Frequently asked questions
What is the biggest cost of owning a luxury car?
Depreciation is the single biggest cost of owning a luxury car. Premium models lose about 48% of their value over five years versus roughly 37% for a mainstream car, per iSeeCars. On a high sticker price that is tens of thousands of dollars — usually more than insurance, fuel, and maintenance combined.
Which luxury brand is cheapest to own over five years?
Lexus is generally the cheapest luxury brand to own over five years. It averages about $551 a year in maintenance per RepairPal — below the all-vehicle average near $652 — and holds resale value better than most German rivals, so depreciation bites less than on a comparable BMW, Mercedes-Benz, or Audi.
Is a used luxury car cheaper to own than a new mainstream car?
Often on purchase and depreciation, but not always overall. A used luxury car skips the steepest first-owner depreciation, yet out-of-warranty repairs, premium-gas requirements, and higher insurance can erase the savings. A certified pre-owned model with warranty coverage narrows the gap and lowers the risk.
How much do German luxury cars cost to maintain per year?
German luxury cars average roughly $900 to $1,000 a year in maintenance and repairs per RepairPal. BMW runs near $968, Mercedes-Benz near $908, and Audi near $987, versus about $652 across all vehicles. Specialized parts and labor and tighter service schedules drive the gap.
Do luxury cars require premium gas?
Many do. A large share of luxury models are tuned for premium 91-octane fuel, and some turbocharged or high-performance engines require it. Premium typically costs 50 to 80 cents more per gallon than regular, adding a few hundred dollars a year to the fuel line over five years of driving.
Does a luxury car cost more to insure?
Yes, usually. Higher vehicle value, costlier parts, and advanced sensors raise repair and replacement costs, so insurers charge more to cover luxury models. Full-coverage premiums on a premium car commonly run well above the national average of roughly $2,200 to $2,700 a year.
Sources
CarsLens is editorial guidance, not individualized advice. This page draws on the iSeeCars cars-that-hold-their-value study, RepairPal, and Kelley Blue Book cost-to-own.