Want luxury and value? These are your cars

By Bengt Halvorson

updated 1:48 p.m. ET Dec. 27, 2007

Having something break on a nearly new car could lead you to love it more.

Lexus IS250 owners can attest to that. Lexus' dealerships offer some of the industry's best perks (in-showroom cappuccino machines, among them) and the brand's service department is known to work overtime for customers. Lexus is just one of several luxury brands offering over-the-top dealership service that separates their vehicles from the rest — and instills buyer loyalty and satisfaction.

"If you have one minor problem that's taken care of immediately," says Alexander Edwards, automotive division president of the market research firm Strategic Vision, "you'll perceive your vehicle to be of a higher quality than if you'd had zero problems."

This eyebrow-raising discovery illustrates an important point: In the luxury realm, if the car isn't perfect, other aspects need to be. That's because luxury-car buyers are purchasing more than the car itself.

"Time cost is what's becoming the biggest factor," says Milton Pedraza, CEO of the Luxury Institute, a market research firm focusing on affluent consumers. Buyers are asking, "How easy is it to own this car?"

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The answer lies in key metrics that measure a luxury car's value, including price, consumer satisfaction, reliability, maintenance and fuel costs.

Behind The Numbers
In compiling our list of the luxury cars that deliver the most return on investment, we first looked at cost. Considering that today's median new-vehicle transaction price hovers around $27,000, and the base price of many "entry luxury" sedans, such as the Mercedes-Benz C-Class and Infiniti G35, is set just above the $30,000 mark, we included all passenger cars and SUVs with starting prices, including destination, over $30,000.

Then, respecting the point that dealership service especially matters to luxury buyers, we considered the 2007 results of J.D. Power and Associates' annual Customer Service Index (CSI) scores, which assess satisfaction with dealership service in the first three years of ownership. Any brands that performed below the industry average (876 on the index's 1,000-point scale) were then removed from consideration. Among luxury brands, this included Mercedes-Benz, at 872, along with Land Rover, which ranked near the bottom, at 843.

Next, we looked to Strategic Vision's 2007 Total Value Index (TVI) scores, which assess one's complete ownership experience, including reliability and dealership experience, on a weighted scale, out of a possible 1,000 points.

In considering these, we removed any vehicles from our list that didn't achieve above-average scores in their respective segments (the firm has 20 of them, covering specific types of vehicles, such as "Convertible Over $30,000" and "Luxury Car").

Finally, we looked at overall five-year ownership costs, as compiled for 2008 models (2007 costs were used when necessary in a few cases) by Vincentric, a data analysis firm providing cost-of-ownership information to the auto industry. We used Vincentric's average costs across each model line, as ownership costs might vary depending on equipment, options, and trim levels.

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