Are You Impressed by Lexus?

September 3rd, 2007 by Bob Bly

A recent radio commercial for Lexus says, “What do people think when they see you driving a Lexus? For one thing, they see you as successful.”

But do they really?

Almost everybody leases their cars today. So you don’t need a lot of money to drive Lexus, BMW, or Mercedes.

One selling point of luxury brands has always been the notion that other people will think more of you when they see you buying and using the brand.

But does this still hold today?

Anybody who has read The Millionaire Next Door Knows that most millionaires don’t drive status cars.

FW, a wealthy client who made his fortune in equipment leasing, drove a nice-looking Oldsmobile, which he loved — even though he could have driven a BMW.

Do you think you are really fooling anyone by driving around in your leased luxury car?

We drive a Nissan Maximia and Toyota Sienna mini-van — both bought new and paid for with cash.

To me, zero debt is a lot more impressive than big monthly lease, mortgage, and loan payments.

Should Lexus rewrite its copy to reflect today’s market perception? Or are they still right on target with their assumptions about status?

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This entry was posted on Monday, September 3rd, 2007 at 7:50 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

68 responses about “Are You Impressed by Lexus?”

  1. Ted Grigg said:

    Debt free IS better. But people are always driven to look successful more than they are by the logic of living within their means.

    Remember Caplesā€˜ all time winning headline, “… but when I started to play…” How you look to others is a universal trait that applies to your home, your clothes, your talents and whether or not you are in shape. Lexus cars turn heads even now in my opinion.

    Ted

  2. Tom "Bald Dog" Varjan said:

    The sad thing is that many people judge others by their cars. For practical reasons I don’t own a car. I rent one when I need one once or twice a month.

    Therefore some people people consider me as a loser. But I’m also secure enough in myself not to care about these people’s opinions.

    Bob, you’re blazingly successful and drive a Nissan. I’ve read somewhere that the late Peter Drucker was driving a Toyota Corolla and Tom Peters drives a Ford F150 truck and a VW bug. For these people the car is a mere means to achieve a certain end. They have better things to do than show off with their cars. Their lives have true meanings.

  3. Joel Heffner said:

    If a Lexus goes by, I don’t look. To me, it is one of several in the same class of cars. On the other hand, if a Rolls goes by…that I notice.

    As for your Nissan and Toyota…perhaps the next “status” symbol might be to have one of those signs in the back of the car that usually says something like “Kids on Board” to say something like “This one is paid for!.”

    Joel

  4. Bob Bly said:

    Joel: The one I’ve seen and like is: “My other car is the Batmobile!” Tom: When I first became a millionaire, I was still driving an old 1984 Chevette. I would have kept it forever, but my wife found it embarrassing and made me give it up. I replaced it with a new Honda Accord — paid for of course with cash (around $13,000 back then).

  5. Michael said:

    There are probably a lot of folks out there like me who know very little about car makes and models, hence we don’t realize we’re supposed to be impressed by a Lexus. Pretty much all cars look alike to me, so the branding and positioning of cars is a wasted marketing effort on me.

    I think there may be an assumption on the part of car manufacturers that everyone is interested in cars, therefore everyone will “get” the branding and positioning they set forth.

    But then, I ride everywhere on a maxi-scooter. I get car drivers turning their heads to watch me as I lane split between then on a stopped freeway while they sit fuming.

    I agree, debt free is the way to go when it comes to cars. My car is paid for and I intend to keep it that way. No way do I want another car payment. I’ll pay cash for the next one. I have to “live like no one else now (by not relying on credit) so I can live like no one else in the future.”

  6. Bob Bly said:

    I sometimes make the OPPOSITE assumption: that a person driving a luxury car in a middle-class town is NOT wealthy. I think: “If they were really rich, they’d also own a spectacular home in an upscale town.” Lots of people of average or below means buy luxury brands (Cadillacs, $200 sneakers with air pumps) to either (a) make themselves feel good or (b) make others think they are rich and successful.

  7. lawton chiles said:

    To me, the Mercedes is the ultimate “I have made it now- look at my mercedes” symbol. Even though Mercedes aren’t that much money- they still capture that market much easier than Lexus.

    Yes- the mega rich drive cars that no one else has- or they just don’t care b/c they don’t need status symbols to scream they have money- yes lexus,change your image before it’s too late- and your copy. Ugh.

  8. Tera Arthur said:

    I drive a Lexus AND I own it with no debt. I bought it for dependability and because of the quality I’ve come to expect from any Toyota product. I bought it used and it’s almost ten years old now. But the sad truth is, there are a lot of people out there who are still impressed by the nameplate on my car. So whether we like it or not, whether we want to participate or not, advertising works.

  9. Bob Bly said:

    Tera: a new luxury car impresses people. I don’t think anybody is impressed by a 10-year-old clunker. That’s why status hungry people (not you) buy or lease a new car every 2-3 years,while you and I drive our cars until they fall apart.

  10. Dianna Huff said:

    Bob,

    I wrote an article last year for MarketingSherpa about marketing to the super wealthy. One of the experts I interviewed broke the wealthy into six groups. For one of these groups, and I forget which one, having status symbols is *very* important. Think Donald Trump and Paris Hilton.

    The Millionaire Next Door type is one of the six. They don’t go for status symbols, but they do enjoy their money. One guy I know who fits this type will buy store brand spaghetti sauce to save pennies but will treat his family to whole Disney World experience, including staying onsite (kaching!).

    For the record, Warren Buffet drives a Buick Towncar. Another billionaire, the guy who started IKEA, drives a beat up Volvo and flies coach.

  11. Bob Bly said:

    DH: my wife is like your spaghetti guy — not into status but into fun. I prefer to spend my money on services, thus buying myself time instead of material possessions (e.g., I haven’t cut our lawn once in 23 years of home ownership).

  12. Suzanne Obermire said:

    Could it be that Lexus marketers are trying to attract those people who simply aspire to wealth, but who may not actually BE wealthy? Since, as you state, it’s pretty easy and not super expensive to lease a luxury vehicle, the Lexus marketing strategy may simply be to reach that person who really wants to impress–be it his girlfriend (or prospective girlfriends), his boss or clients. If that is the case, then Lexus may be hitting its target market right on the head!

  13. Jodi Kaplan said:

    Personally, I don’t own a car (it’s not practical here in NYC). I’m not impressed by a Lexus, but would stop to look at something with considerably more character or pizazz (say, either a classic Bentley or a Ferrari).

    That said, I have friend who insists that he closed a big deal because the client was impressed by the BMW he was driving at the time.

  14. Bob Bly said:

    Jodi: My father, who was not wealthy, always drove a big second-tier luxury car (e.g., Buick LeSabre, Chrysler Fifth Avenue)for the same reason as your friend: he felt it impressed people.

    My theory is that it can have the opposite effect. Example: you need to hire an attorney. He has a new BMW parked in his office lot. You may think he is too expensive or too focused on making money, not helping his clients.

  15. SpongeBob Fan said:

    A man I know drives a paid-for Infiniti because he likes the car. He often parks it where clients won’t see it because he doesn’t want them to think he’s a profligate show-off.

    My best friend and her husband own a paid-for Infiniti and a paid-for VW bug. They bought both cars because they like them a lot. (The Bug is a cheerful car, that’s for sure!)

    I guess if it matters a lot to someone else that a person’s car is “impressive,” that’s too bad. But perhaps that’s a New England attitude?

    (Anyone else a fan of Dave Ramsey – radio guy who encourages having no debt. He says a paid-off house is today’s status symbol … not a car-loaned BMW. I’m paraphrasing a bit there, but it’s close.)

  16. Bob Pessemier said:

    This is exactly the kind of thing I teach in our Top 5 Money Mistakes classes. Car loans (one of the top 5 mistakes) can cost people well over $500,000 in the long run. Opportunity costs can really cost. We try to get people to realize that the only car they can afford is the one they can pay cash for. If I’m wealthy I can buy a BMW with cash. Why pay rent on money?

  17. SpongeBob Fan said:

    Clarification – the “profligate show-off” above should have been in quotes. It’s how my friend feels people would/could/might feel – not at all how they actually would or do!

    My position – people should drive whatever car they love that they can afford. (I’m trying to convince my husband that we need a pick-up truck!)

  18. Bob Bly said:

    Sponge: I take a slightly different approach myself: I drive a car that is LESS than I can afford. My philosophy for self-employed people is: live below your means. I also agree with Dave Ramsey, and we have no mortgage on our home, and no home equity loans or lines against it. Bob: I’ve heard it before, and agree: the only car you can afford is the one you can pay cash for.

  19. Jodi Kaplan said:

    Bob, my grandmother always paid cash for her cars, and she drove a tough bargain. Car dealers were afraid of her. :-)

  20. SpongeBob Fan said:

    Living in Massachusetts where the weather can be horrible and drivers are truly insane, I’m always stunned that people bother to buy/drive super-expensive cars here. (And Bob – having grown-up in a 4-bedroom house that my parents s-t-r-e-t-c-h-e-d to pay $16,700 for in 1967, I think anything more than about $20,000 for a car is A LOT.)

    Paying $50,000+ for a vehicle to put on these roads is completely unthinkable to me!
    (Plus Massachusetts outrageous insurance on top of that … no auto insurance competition here!)

    But I do spend a lot of time in my car, so I factor that in too.
    Reliability, comfort & safety trump “luxury brand name” to us.
    (Yes – one of our cars is a Honda, the other a Toyota.)

  21. Kelja said:

    I think the ULTIMATE look-at-me-car today is the Prius (or something like it). Here in Southern Cal we have people who own million+ homes driving around in Prius’ (plural of prius is?). Talk about insanely hypocritical. Makes them feel good about themselves, I guess. But it’s all about image.

    BTW, My neighbor calls them sneakcars. A nosy neighbor of her’s owns 2 and, when the cars are in electric mode, you can’t hear them coming.

  22. Art Luff said:

    It’s all about perception!
    I drive a brand new Ford Focus, Stick shift, 4 cyl. which gets me almost 400 miles on a tank of gas ($30.) Can I afford an Escalade or an Avalanche? Yup, sure can! Economy is what I’m talkin’ ’bout

    Art

  23. David Tandet said:

    http://www.youtube.com/watch?v=IkEu-PdVlK0

    I’m impressed by any car that can parallel park itself. I’m impressed by any person that can parallel park himself.

  24. Jill said:

    Just because we’re not impressed with flashy things doesn’t mean that others aren’t. I could care less about a Lexus, but at social functions I still see average people gabbing over someone’s BMW or Lexus. Granted, half of those people are talking about the person’s good taste and not their bank account.

    I think the bigger question is how diverse America is becoming and how that will affect advertising/marketing professionals. If you’re not on the same brainwave as your customer or audiance then you’re gonna have a hard time relating.

  25. fdsa said:

    http://blog.guya.net/2006/06/22/stop-wordpress-comments-spam-with-akismet/

  26. Dave Origano said:

    Nowadays people are willing to spend more on the ‘experience’ of driving a luxury car for example. More and more people drive such cars, but it takes a while before the car becomes a commodity.

    Here in the Netherlands Lexus hasn’t reached that point yet. But it does go for BMW and Mercedes, especially since they released smaller, less expensive vehicles for the ‘normal guy’ – as stated in their own TV ads.

    Those last two are clearly messing up their brand. I can’t say much about Lexus yet since the results haven’t shown here yet.

    -Dave

  27. darkstar3D said:

    I prefer debt free. I bought a new Eddie Bauer Explorer in 1999. I love it some much I still drive it, something special about driving for free. When it quits on me (has never broken down, 255K miles) then I’ll think about something else.

    What really gets me is seeing someone at the grocery, paying for food with government aids, driving NEW Cadillacs, probably living government subsidized as well.

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  59. Aaron said:

    Most posts here are melodramatic and slightly bitter in tone. So what if someone leases or buys a Lexus? They’re nice cars and if you can afford the expense WHY NOT? It’s more an issue of preference.

  60. Shane Guy said:

    I Believe in what Lexus has said but I believe more in the contents of “The millionaire next door” though I havn’t read it I do have a fair gist on what it is about. I understand Lexus aims there market at everyone but mainly at the middle class people who a majority (not all) of them have a core-value that is status as it makes them feel important when others take notice of them (this happens to be a void in todays working-class society as everything happens almost at the click of a finger and if no person around them is to fill this void then they’ll look for the closest thing that will) anyone ever read rich dad poor dad? He speaks about how in the future there will only be a rich class and poor class and no middle class unfortunately this does not just alone reflect the money people will have but also their attitudes and themselves internally

  61. 4x4 said:

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  66. William Pyles said:

    We drive a Lexus because we feel safe and comfortable in a dependable automobile. The fit and finish of Lexus is great and the technology shows good quality control. The value of dealer service is very acceptable. The depreciation rate is low compared to other makes. We do not lease but have found the interest rates and incentives to buy within our budget. The money you spend on automobiles buys you satisfaction not status. As we shop and compare automobiles we choose Lexus!

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