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Flashy Cars are Financial Heresy
For starters, we have to address a somewhat philosophical question about how people think about their vehicles. For most new car buyers, their car will be the most expensive thing they’ve ever purchased next to their house—and they may have never owned a house! This naturally brings out a vulgar urge to show off. This whole dynamic is actually quite different for wealthy car buyers: their house probably isn’t their largest asset, so they see a vehicle as more of a utility purchase than a financial dick-measuring device. Picture it like buying a vacuum cleaner—you don’t really care what it looks like or who makes it, you just want it to work.
People who take their investments seriously understand that vehicles are just about the worst investment out there, so they usually buy something practical, reliable, versatile, and reasonably priced. What they’re looking for is VALUE. Two cars deliver this more than almost anything else on the market, and they’ve both developed cult status among the plutocrats. These cars are—drumroll please—the Subaru Outback and the Jeep Wrangler.
Rich People Car #1: Subaru Outback
The Subaru Outback developed a reputation over the past 25 years as the conveyor of every yoga-practicing anthropology professor from Boston to Berkley. But there are a few key things most people don’t know about the Outback, and indeed Subaru as a brand.
First off, Subaru customers have among the highest credit scores in the industry and are perennially ranked in the top 5 of all brands. Subaru also trounces the industry in another financial metric: cash sales. Roughly 10-12% of car buyers pay cash industry-wide for their new cars, but Subaru nearly triples the cash number 36% these days. They also lead the industry in repeat buyers, with 60% of Subaru customers buying another. Lexus comes in second place.
The Outback is Subaru’s most popular model. A well-equipped model that I spec’d out online came to just over $37,000. So why is this relatively cheap car so popular with rich people? Well, I’d say it’s because Subaru serves a massive helping of two of their favorite things on a steaming hot platform: value and stability. The Outback has been the less ostentatious and more practical SUV alternative for going on three decades. The quietly well-off have been buying these things for years. They like all the room for activities, sturdy interiors, good road handling, and the car’s safety.
They also like that the basic package has stayed the same: It’s still a five-passenger wagon with chunky plastic bumpers and a standard roof rack. Stability is an attractive commodity among the Country club set: Subaru’s have always been reasonably priced, and they’ve always had high resale value—much more Berkshire Hathaway than Bentleys and bottle service.
Rich People Car #2: Jeep Wrangler
That said, if you’re looking for resale value, the undisputed title for best resale value goes to another favorite of the stealthy wealthy: the Jeep Wrangler. The Wrangler is quite possibly the only American car that is genuinely classless—but a lot of wealthy people have a Wrangler because it’s a car that simply gets shit done.
Need to take the dogs out to the park? Take the Wrangler. Haul sweaty hockey gear around? Wrangler. Something to tow the boat? Fishing trips? Antique haul? Wrangler. When the kids go to high school and need a car, you can give them the old one and buy a new dog hauler.
The Wangler pulls off one of the hardest tricks in the book: It’s cool without being ostentatious. It’s quintessentially American, endlessly utilitarian — and rugged individualism never really goes out of style in this country. It’s just like a Pendleton blanket or a log cabin that’s been in the family since it was built. Ralph Lauren—the Bugatti collector who literally figured out how to sell the American dream—drives an old Wrangler around his Telluride, CO ranch. Need I say more? A new Wrangler 4 door reasonably equipped comes in between $40 and $ 50K. It’s not the cheapest SUV on the market.
Still, with regular maintenance, the Wrangler can easily reach 200k miles — it’s the only vehicle to skirt Chrysler’s dodgy reliability reputation consistently. The tech on these trucks isn’t complicated or difficult to repair either. The Wrangler is a perfect multi-generation vehicle, and it’s exceptionally suited for the kind of people who like to keep it in the family.
Conclusion
To sum it up, both the Wrangler and Outback are practical, utilitarian, have excellent resale value—and they both have fiercely loyal customer bases. You might not be able to make every decision like a millionaire, but I think many people could stand to learn a thing or two from the plutocrats when it comes to buying a car. Spend below your means, buy a car you’re okay with keeping for a long time and buy into a company that cares about repeat business and keeping loyal customers happy.
I priced out some pre-owned Outback recently, and the dealer was incredibly accommodating—because they know that some of their pre-owned customers could easily buy out the entire lot. So before you lease a new Porsche or take out 72-month financing on that F350 Diesel, consider how the smart money drives to work… even if they work at a shell company.
