Wealthy individuals do both, but often lease high-end cars for convenience, new tech, and tax benefits (as business vehicles), while others buy and hold for long-term value or flip them for newer models, using cash, financing, or specialized ultra-luxury lenders, with many viewing cars as depreciating assets to be managed, not owned long-term.
Which car brand is driven most by millionaires? Though wealthy consumers are known for buying luxury car brands like Rolls-Royce, Mercedes-Benz, Jaguar, or Porsche, you might also find them driving mainstream brands such as Honda, Toyota, and Ford.
Many wealthy people completely skip the traditional car-buying experience. It's true! “A lot of my friends text their car guy, someone who finds the car, negotiates the deal, even has it delivered to their house for a test drive,” Sethi shared. This approach isn't necessarily about getting the absolute lowest price.
Wealthy people factor this into their decision-making. If you're planning to keep a car for more than six years, buying almost always makes more financial sense. But if you prefer driving newer cars with warranties and don't mind ongoing payments, leasing might fit your lifestyle better.
But according to personal finance expert and New York Times bestselling author Suze Orman, you should never lease one. “Leasing a car is the biggest waste of money out there. You only get to drive at 12,000 miles. You have to have a lease gap insurance.
The 90% rule in leasing is an accounting guideline for classifying leases, stating that if the present value (PV) of a lessee's minimum lease payments equals or exceeds 90% of the leased asset's fair market value (FMV), the lease should be treated as a finance lease (or capital lease) rather than an operating lease, reflecting essentially a purchase for accounting purposes. This rule helps determine if the lease transfers substantially all the risks and rewards of ownership, requiring balance sheet recognition of the asset and liability.
Because lease payments are a lot less than car loan payments, many people use the difference to drive a more upscale luxury model that they might not be able to afford to purchase.
The lease payment for a $45,000 car typically ranges from $300 to $500 per month, depending on factors like the down payment, lease term, residual value, and interest rate.
About 90% of millionaires build wealth through long-term investing, often focusing on real estate, starting their own businesses, and making consistent, disciplined financial choices like budgeting, saving, and continuous self-education, rather than flashy spending, with a strong belief in controlling their own financial destiny. They prioritize tangible assets and income streams, using strategies like leverage and tax benefits, and avoid excessive spending on depreciating assets like luxury cars.
Dave Ramsey's core car buying rule is to pay cash for a reliable used car, avoiding debt and new car depreciation; he suggests only buying new if you're a millionaire, and generally, the total value of all your vehicles shouldn't exceed 50% of your annual income. His philosophy emphasizes buying what you can afford outright, viewing cars as depreciating assets that shouldn't trap you in debt.
For example, if you bring home $50,000 per year after taxes, your monthly take-home pay is probably around $4167. Based on the 10 percent recommendation, you could reasonably afford to pay around $416 for a car payment each month. Of course, you don't have to spend the full 10 percent of your monthly earnings on a car.
It might not save you money
Yes, you can sign a long-term lease, but that may negate the monetary benefits of leasing instead of buying a car. That's because leasing typically costs you more than what you might have taken out in a long-term car loan.
The "1% lease rule" is a guideline in both real estate (rental income should be 1% of property cost) and auto leasing (monthly payment ideally under 1% of MSRP), used for quickly assessing potential deals, though it's a simplified benchmark that doesn't account for all expenses or market variations. In car leasing, a $40,000 car should ideally lease for around $400/month (before tax), while for real estate, a $200,000 home should aim for $2,000/month in rent.
Generally, a good credit score for car financing falls between 670 and 739, based on FICO® Score standards — the scoring model most commonly used by lenders. However, it's important to keep in mind that not all lenders follow the exact same criteria.
Beyond the monthly payment, you'll also face years of variable expenses like car insurance, gas, maintenance and taxes, which can spike without warning. By considering these costs before buying a new or used car, you'll be better prepared for the financial ups and downs of hidden car ownership costs.