What are some of the best luxury cars in Australia?

A vehicle is often considered a luxury car when it comes with higher levels of comfort, performance, and features than most mainstream cars… and has a higher price tag to match.

Luxury cars are typically designed to provide an elevated driving experience and a sense of indulgence for the occupants. However, what may seem luxurious or extravagant to one person might be commonplace to another, meaning  the definition of a luxury car is often subjective.

The Australian government Is more specific, and defines luxury cars based on their price range. According to the Australian Taxation Office (ATO), a car priced above a certain threshold attracts a Luxury Car Tax (LCT), while those priced below the threshold don't. If you’re considering purchasing a luxury car, you should check the current LCT. The Luxury Car Tax threshold is revised annually and is currently set at $91,387 for fuel-efficient vehicles and $80,567 for other vehicles for 2024-25.

Here are some of the best luxury cars in Australia according to Drive’s 2024 Car of Year awards list:

Best Luxury Car under $100K: 2023 Mercedes-Benz C-Class C200 1.5L Sedan RWD

This is the second year in a row where a Mercedes-Benz C-Class vehicle has won this category. Features that contributed to its victory include the luxurious cabin and the included technology, such as the infotainment screen and control centre. 

Best Luxury SUV under $150K: 2023 Mercedes-Benz GLC-Class GLC300 2.0L SUV 4WD

As well as taking out the Best Luxury Car under $100K position, Mercedes-Benz took out the Best Luxury SUV Under $150,000 with its GLC. As well as offering a powerful but refined engine and transmission, the cabin comes packed with luxurious technology, including customisable and connective infotainment options.

Best Luxury Off-Road SUV under $150K: 2023 Land Rover Defender 110 D300 X-Dynamic SE 3.0L Diesel SUV 4XD

Drive described the Land Rover Defender as “nothing short of a technological off-road powerhouse.” Additionally, there are a variety of styles, specifications and optional extras to choose from, allowing the Defender to appeal to a variety of tastes and budgets.

Best Luxury Electric Vehicle under $150K: 2023 BMW iX xDrive40 SUV 4WD

In the luxury EV category, BMW took home the top spot, thanks to its cabin design and performance. The iX does away with the minimalism that’s typical of many EVs in favour of avant-garde design flourishes. The only potential downsides on offer were the smaller cargo capacity and the exterior’s somewhat heavy appearance.

If you have the means to purchase a luxury car, there is a wide selection of vehicles that may suit your tastes and needs. However, choosing a luxury car to buy can be challenging. While car review sites like Drive and CarsGuide can provide useful information and expert opinions, there is no universally perfect luxury car for everyone. 

The right choice for you will depend on if a car suits your needs and provides the best value for your investment, whether in terms of luxury or performance.

Here are some factors to consider that could help you make an informed luxury car choice:

1. Compare safety ratings

Regardless of the type of car you're looking at buying, safety should be a priority. A good starting point could be visiting the Australasian New Car Assessment Program (ANCAP) website to view and compare the safety ratings of the vehicle model or models you may be interested in. Alternatively, you can set the category filter to 'luxury' to get a list of all the luxury vehicles with their ANCAP Safety rating.  

ANCAP is considered the go-to place for measuring and assessing car safety. They do thorough testing on all levels of safety and reliability, including crash testing all new cars that come onto the Australian market. 

When comparing the ratings, remember that ANCAP Safety's rating criteria are updated annually, but the ratings themselves are valid for up to six years. This means that while a car will maintain its rating for six years, a more recent rating awarded to a car with the same score can indicate a higher level of safety. You can sort the results on the website according to the latest rating year to explore the safest cars within a particular category. It also means that you may be better off choosing a car that’s been assessed more recently by ANCAP Safety.

2. Fuel efficiency

Another important factor you should consider when looking at a new luxury car purchase is its mileage or fuel efficiency. This is especially important if you plan to drive frequently or cover long distances on a regular basis.

Luxury cars are typically high-performance vehicles, but in the past, this was often a trade-off against fuel efficiency. However, many luxury car manufacturers now use modern technology to help optimise fuel efficiency without compromising performance.

A fuel-efficient car can be good for the environment and your pocket. You can choose electric or hybrid cars instead of petrol-powered cars if you prefer a greener ride. Even though these lower-emissions options might be more expensive to buy, they may be able to help you save money in fuel costs over the long term. But if you are buying a petrol car, make sure to compare the mileage to make an informed choice.

3. Features and technology

Luxury cars often come with cutting-edge features and the latest technology, setting them apart from other vehicles. While they might not be as affordable, they are generally high-end vehicles equipped with innovative features to elevate the overall travel experience for the occupants.  

When comparing luxury cars, it's best to thoroughly examine the range of features offered. Safety is paramount, and it's worth checking for the latest safety features in any car you’re looking to buy. Besides inspecting the interior and safety features, you might want to check for performance-oriented features like adjustable suspension settings and different driving modes.

4. Price

While luxury cars typically command higher prices than other vehicles, the cost of a luxury car can vary considerably based on the specific make and model you choose. Regardless of your preferences, it's essential to establish a practical budget to make sure you don't go overboard, even if your budget allows for some indulgence.

When considering the costs of buying a luxury car, you should also consider the other ownership costs, like insurance, fuel costs, and what you'll pay for the regular maintenance and upkeep of the vehicle. As luxury cars are mostly high-performance vehicles, they're likely to have higher ongoing costs across the board. For instance, maintenance costs may be more expensive due to specialised parts and servicing requirements. To minimise long-term costs, it's worth looking up different car brands to pick one with reliable after-sales service.

You may also need to pay the luxury car tax (LCT) as an additional cost when purchasing a luxury vehicle. This tax is imposed at a rate of 33% on the amount above the LCT threshold set by the ATO. Although the tax is paid by businesses engaged in selling or importing luxury cars, in most cases, the dealer will pass on this expense to the buyer when setting the vehicle’s sale price .

If you’d rather not pay for your luxury car in full upfront, you may consider applying for a car loan. Various car loans are available in the market, each with different borrowing limits and features. For example, some providers may allow you to borrow up to $100,000, while others may approve loans up to $250,000 or even more.

However, it's important to note that higher borrowing limits usually apply to secured car loan products, where your car is used as collateral in case you ever default on your loan. You also typically need to have a good credit score and meet stringent income criteria to qualify for a higher loan amount. Still, the exact requirements vary between lenders and comparing several loans in the market can help you find one that best suits your needs.

Before applying for a car loan, you might like to use RateCity's car loan calculator to estimate the repayments for different loan sizes. This can help you set a practical budget for your purchase without overextending yourself. Additionally, consider checking your credit score before applying for luxury car finance, as it can influence your borrowing capacity and the overall application outcome. ​​