9 Factors Why Are Luxury Cars So Unreliable

Expensive Car Facts

Life’s too short to drive boring cars. In reality, many modern-day luxury cars are not as reliable as they were 50 years ago. There are some distinct reasons for that. Why are some luxury brands such as BMW, Mercedes, and Land Rover known to be unreliable and expensive to own?

It’s a big secret that many luxury brands, especially European ones like BMW, Mercedes, Landrover, and Audi, are known to be expensive cars to own. But why are these companies known to be unreliable long-term and have high repair costs? What do you need to know before buying one of these cars? Let’s know about them.

Why are luxury cars so unreliable?

European luxury brands are not the only ones known for reliability issues. You can have all issues with many domestic brands, including Ford, Jeep, GM, and a few others. But the big difference will be the repair cost because European luxury cars take repair costs to a new level.

Something as simple as a rough running engine with an engine misfire that involves replacing spark plugs, ignition coils, or fuel injectors can easily cost 1 to 2000 on any of these cars. If the engine has serious oil leaks and requires full resealing, you can easily double that number. Depending on your model, a new remanufactured engine can cost anywhere from 20,000 to upwards of $60,000.

Almost any of the parts on any luxury brand can cost enormous money. If you need to replace the full air suspension system on a Range Rover, that can cost you as much as $8,000. It’s no surprise that the value of many of these European luxury cars is tied to how much warranty coverage they have. Once the warranty period ends, the values begin to drop extremely fast.

So, it’s important to mention that many European luxury brands are fairly reliable for the first 4 to 5 years of ownership during the warranty period. When they become much older beyond 7 to 8 years old, they cost a lot of money in repair issues. So if you’re only planning on buying one of these cars for a short period, you don’t have much to be concerned about.

Now, I will discuss the 9 main reasons why are expensive luxury cars so unreliable. Let’s drive!

1. Competitive marketplace

Cars last a lot longer in terms of body structure and integrity. Luxury cars have a tight, aggressive, and competitive marketplace. Every single manufacturer has its level of competition.

For example, the supply chain is one of the big challenges. They have to get more competitive with buying the parts they source from. So they put in modules, chips, and electronics that might not usually be as high grade as they should be, and they do that to save an extra buck.

2. Using plastic

To save costs, many luxury cars use a lot more plastic. There’s a lot of plastic in BMW, and there are many known failures in modern BMW. It all started back in the E90 series, where they started integrating a lot of plastic and cooling parts. So you would almost always expect water pump failures, radiator failures, and thermostat cooling hoses. Everything starts to leak because of the heat in the engine.

With modern cars mostly turbocharged, that heat is even more exaggerated, and you have accelerated wear and tear. So it’s that competition that drives the use of plastics and poor-grade materials, causing reliability issues down the road after five or six years.

3. Advanced technology

Luxury cars were also becoming a lot more complicated than ever before. More advanced engine technology, computers, sensors, and other things made cars much more complicated and expensive to repair.

The final nail in the coffin for reliability was when many of these luxury brands began reducing the maintenance required for their cars. In the eighties, BMW and Mercedes had intense maintenance requirements and recalls.

These companies began dramatically stretching their maintenance intervals in the nineties, recommending oil changes every 15,000 miles or 25,000 kilometers and eliminating other fluid changes like transmission, fluid, and coolant. One of the reasons this was done was to reduce the perceived maintenance costs of their cars and make them less expensive and easier to maintain.

4. Operating costs

If you plan to buy a luxury car from a European brand such as BMW, Mercedes, or Audi, there are many things that you can do to make sure that you don’t get burned and end up spending an enormous amount of money on operating costs.

The first thing you might want to consider is leasing one of these cars rather than buying it. When you lease a car, you’re only going to have it for around 3 to 4 years under the warranty period. So you’re not going to have to worry about expensive repair issues.

Having that warranty is a huge benefit. A good extended warranty plan for these luxury cars can easily cost you around 3 to $4000, depending on your coverage level.

5. Focusing on the issue

Modern luxury cars are no longer reliable because the focus has shifted. They’ve gone from durability, reliability, and sturdy transportation, and they’ve all moved it along to a profit-driven business model. That, unfortunately, works against you as the customer works great for them.

But what they start cutting costs on obviously the assembly line manufacturing. BMW, Mercedes, and Audi have some of the higher levels of failures initially out of the warranty box. The other part is where the service sometimes takes a hit.

6. Cost of labor rates

Everything goes up because of inflation. People at the local dealerships, the mechanics, the service people, and the salespeople need a little extra profit. So the end-user sees increased shop labor rates 180, close to $200 per hour in Canadian fees. As a result, many people are starting to skip on maintenance, skip on repairs, and do it yourself.

When the wrong person gets their hands on the car, sometimes other stuff starts to break. Things don’t get treated maybe as they should have from the factory. But people do it because they’re thrifty, especially as cars get older, four or five-six years of age, and they’re out of warranty. People do what they have to do to keep their car running may not always be the best choice.

7. Lease and finance availability

Lenders provide buyers, so it becomes easy to tie in with a two or five-year lease. The day of buying a brand new BMW or a Mercedes no longer feels special because everybody is starting to buy these cars. Finance rates are affordable. Lease rates allow you to get into one of these great cars. They’re still an excellent driving machine.

But the reality is there are so many cars flooding the market. When they return from lease, the used car market drives them into the hands of the second, third, and fourth owners, who start to neglect the cars. They don’t have the funds to own and operate a modern-day luxury car. So those second-hand cars off leases take a hit in dependability, and first-hand, people are quick to flip the next one.

8. Supply chain

The secret reason expensive modern cars aren’t as reliable as they used to be is that every brand is upping the ante in technology and performance. These also have a timing chain issue.

Everything’s pushed to the thermal limits because turbocharging makes a vast amount of power. But Lexus doesn’t have as much power and performance, but they keep it simple and reliable. Behind everything automated, there’s a relay or a module.

Unfortunately, sometimes that stuff starts to fail, which takes us back to the supply chain. Where are they getting some of these electrics from to support these parts? If they’re chipping out somewhere along the way, maybe they engage an electrical component manufacturer. They talk supply chain gets them the lower grade part, and you’ll see earlier failures with some of these cars.

9. Globalization

In the 1970s and 1980s, companies such as Mercedes and BMW were well-known for their engineering and build quality. Many of the cars they made were durable and long-lasting, qualities long known for. Only when the nineties rolled around that a lot of that begin to change fairly quickly, and a lot of it had to do with globalization. That’s because the competition in the market was increasing so fast.

Car brands were under a lot of pressure to offer a lot more for a lot less. So we started to see a lot more cost-cutting, downsizing, and outsourcing, all of which impacted the reliability of their cars.

Last words

The best thing to do is buy one from a new car dealership. New car dealers often have a good selection of lightly used cars that they typically receive on trade-in from owners looking to upgrade to a new car. The other important thing you’ll want to know about buying any high-end luxury car is whether it comes with service records and how well it’s been maintained.

The good news is that a few luxury brands don’t have many of these issues. Companies like Lexus and Acura are known for their strong reliability, low repair costs, and low cost of ownership. So if you’re looking for a luxury car, buying either is a good choice. Let me know what you thought of this article, and if you have any suggestions, leave a comment below.


Read more about cars:

Why Are Supercars So Expensive?

Why Are German Cars Unreliable?

Why Is Toyota So Popular?

Why Are German Cars Expensive?


Sources:

Mason, Paul. Italian Supercars: Ferrari, Lamborghini, Maserati. Rosen Publishing Group.
Wasef, Basem. Speed Read Supercar: The History, Technology, and Design Behind the World’s Most Exciting Cars. Motorbooks.
Marshall, Stuart. “Rewards and frustrations of the super cars”.

Julia Rose

My name is Julia Rose. I'm a registered clinical therapist, researcher, and coach. I'm the author of this blog. There are also two authors: Dr. Monica Ciagne, a registered psychologist and motivational coach, and Douglas Jones, a university lecturer & science researcher. I would love to hear your opinion, question, suggestions, please let me know. We will try to help you.

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