digest
Short Summary
Main recommendation: Think carefully about luxury vehicles before buying, because they are more enjoyable to imagine than to actually drive or own. Research suggests vehicle price does not change how people feel while driving, and luxury car owners are not measurably happier than frugal car owners.
Key Points
- People expect luxury cars to feel better, but in a 2011 study by Schwarz and Zhu, the emotional experience of driving was unrelated to vehicle price once people actually drove.
- The gap comes from focalism: when asked, people picture the car's appealing features, but during a drive they focus on arriving on time, traffic, and passengers.
- A 2015 paper, "Luxury Car Owners Are Not Happier Than Frugal Car Owners," found no happiness advantage for luxury owners.
- Money spent on expensive vehicles may come at the cost of spending that more reliably boosts well-being, such as saving time, active leisure, hobbies, shared experiences, and frequent small pleasures.
Details Worth Noting
- Concrete instructions: Before buying a luxury vehicle, think about your most recent commute or grocery drive and ask how you actually felt during that episode, and whether a luxury vehicle would have changed that experience.
- Concrete instructions: Ask whether you would still want the luxury vehicle if you lived alone on a desert island.
- Concrete instructions: Ask whether your opinion of someone you admire would change if they drove a more expensive vehicle.
- Positional goods adapt quickly: people get used to a new purchase, and a friend's nicer car makes yours feel less special, creating a "hedonic treadmill."
- Per Andrew Hallam's 2021 book "Balance," the median cost of vehicles driven by the world's wealthiest people is 46,000 US dollars.
- In a 2016 survey cited in "The Next Millionaire Next Door," the median millionaire's most recent vehicle cost 35,000, with Toyota, Honda, and Ford the most common makes.
Bottom Line
Luxury vehicles mainly deliver anticipated pleasure rather than lasting enjoyment, so the purchase is worth weighing against what that money could otherwise do for your well-being.
