@dimple2001: With all due respect, I don't think any cars in the market qualifies as "a metal box with wheels, brakes and gas and preferably couple of seats". Yes, the quality of parts do make a difference, but that is exactly where I am struggling to understand. A 12K car uses cheap parts. A 30K car uses pretty good parts. Above the 40-50K range, are the cars using so expensive parts adding much value?

@ashedfc: Latest Mustang comes at <30K and can hit 100 is 4 sec! Again, what is one gaining by paying 100K+ ? Frankly, resale value of cars are a joke. A 30K car with 'low' resale value may get you 10K in 5 yrs. a 100K car with 'high' resale value will get you 60K. In reality, the depreciation on the 100K car is double - 40K vs 20K!

Please don't get me wrong. I am not against any one buying any car of any price range. I am just trying to understand where the high price is coming from. Is there any real intrinsic value or just a huge profit margin (like dimple2001 mentioned) fetched by the brand name?

Some cars are status symbols , some are sporty and some are cool and chick magnets. You buy what you believe is an extension of yourself . All things in life make a statement. Cars are just one of them that is highly visible ...

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Differences can be due to technology, cost of parts, features, total costs including wages, etc. High end cars are produced less and have a lot of features not found elsewhere that drive its costs up.

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1) There are two types of Features (regular options and High End Features). I would call power windows, AC, Heated seats, leather, navigation, sunroof , HID, power seats etc. as standard features. Cost of cars are not always dependent on the regular Features..
e.g. Heated rear seats are standard on Entry level Sonata but an option on the BMW 5 series (no standard) and not available on BMW 3 series. 3 series typically cost around 50K incl taxes can be a lot more but not much less.


2) High End features are typically only available in expensive cars (reclining rear seats, power sunshade, adaptive suspension, power doors and power trunk. You will not find them in regular cars.

3) Fit and Finish: Based on example 1 above, check out the interior of a BMW 5 series equipped with heated rear seats and a sonata with heated rear seats. You will know why the BMW costs more. There will be very little plastic, the quality of the buttons will be much better, there will be more wood/metal around.

4) Driveability: Again using example 1 above. Drive both the cards, even if the 0-100 times are same, you will be amazed at the difference in how each car gets you from 0 to 100. The engine smoothness, transmission shifts and the experience will be very different.

5) Service: When you pay premium you get premium service. Find two friends, one that owns a toyota and one that owns a lexus. Go with them to the dealer for maintenance/service. You will see the huge difference in the dealership and the service experience. if the service takes time Toyota will offer pickup and drop off, Lexus will give you a loaner for the day so that you can drop in whenever you are done.

5) My cousin owns a toyota and a BMW. Dealer brake service cost at Toyota is 200$, BMW is 800$. If you buy a Porsche brake service is 2K and i heard Ferrari is about 4K. I have driven the first 3 cars mentioned, the toyota brakes are v good, the BMW are totally awesome and if you brake the porsche hard it will stop like as if you hit a wall right there no comparions. So there are internal mechnaicals that are different at different price points.

6) Acceleration: speed limit may be 100kmph or 120kmph. A lot of people take their car on tracks... there you can do 300kmph if you wish to..a Mustang GT will beat the standard mustang on the track easily...thats why Ford charges a premium for the GT model


All this said the difference in the materials, driveability, features, mechanicals, service do not amount to the difference in the cost but contribute significantly to the cost...
Saying all cars are same is like comparing a 2000 sq ft town home to a 2000 sq ft semi to a 2000sq ft detached home. All are same size, all may have AC and Hardwood etc. But the cost of the detached in the same neighborhood will always be more. IS the cost difference justifiable because a detached home will need more bricks or more grass.. or they have to pay the city more for land..not really..but still builders charge more.. and and most people want to buy a detached home (if they can afford it) even if the property taxes and utilities cost is more on them.
Same logic goes for cars...

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