Why Are BMWs So Expensive? (9 Reasons Why)

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Bruce Coleman

Bruce Coleman is a diesel mechanic and car tester with 20 years of experience. He's a member of various vintage car clubs, and he loves restoring old motorbikes.

Rightfully claiming the throne of German luxury cars, there’s no wonder BMWs are so expensive.

A kidney-shaped grille, an emblem with a hint of blue, and two headlights branching out like an eagle’s wings—a BMW is hardly mistakable. You can spot it miles away, and that’s hard to compete with. But is that the only reason it’s expensive? No, here are nine reasons why.

Why Are BMWs So Expensive?

BMWs are expensive mostly because of the high-end materials, impressive dynamics, luxurious interiors, solid safety features, and above all, branding. Not only that, but they’re also expensive because of the shipping costs from Europe to other continents, along with the sharp inflation rises and the high labor costs in Europe.

To learn more about why BMWs come with heavy price tags, read on!

1. Branding: The Superiority of the Kidney Grille

Before I go into the technical details, I’ll rip the bandaid and tell you the biggest reason BMWs are so expensive. It’s neither the performance nor the German label. It’s the brand.

Yes, you’re paying for the incredible acceleration and the high-end leather seats you’ve been dreaming about, but you’re also paying a good chunk for the logo, for the privilege of owning a BMW.

Put Lexus and BMW head-to-head. Both are renowned luxury car manufacturers, but owning a BMW is more prestigious for some reason. It’s simply the power of branding.

2. Inflation: High Demand, Low Supply

It’s true that BMWs are mainly expensive because they’re luxury cars, but that’s not it. They’re also so expensive because the inflation rates have been going crazy since the 2020 pandemic.

Just as Europe was recovering from the disastrous economic consequences of the pandemic, it got a huge blow to the guts, namely the Russian-Ukrainian war. The war typically affects European countries the most, and some countries are more vulnerable to the crisis, such as Germany.

Since Germany relies heavily on Russia for energy and plenty of industrial sectors, the country was directly affected by the sharp rise in inflation.

Since most BMWs are made in Germany, their prices are getting higher due to the low availability of industrial materials and the high demand of customers.

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3. Labor Costs: The European Union

Another reason BMWs—and most European cars for that matter—are expensive is the high labor costs in Europe.

Doing quick research, you’ll find out that labor wages in Europe are significantly higher than average. Not only that, but Germany is also one of the countries with the highest wages.

Since most BMWs are made in Germany, the high labor cost is added to the car’s price.

The German company has been trying to resolve this issue by making some models in the US. That way, the cars are free of high labor costs and tariffs, accounting for a lower price overall for the Americans.

However, most models are still exclusively made in Germany.

4. Shipping Costs: High Tariffs and Duties

The further European cars are shipped from their origin, the higher their prices are. Since German cars are considered a luxury, they’re subjected to high tariffs, which significantly adds to their costs when they’re shipped.

For example, the US puts a 2.5% tariff on European cars, which is a relatively high rate considering that the cars are already costly. So, even if the car is on the affordable side of the market, its price will get higher when it gets shipped out of Germany.

That’s another reason why BMWs are so expensive outside of Europe.

5. Driving Experience: Smoother Than Butter

5. Driving Experience: Smoother Than Butter

If there’s one thing to know about BMWs, it’s that they’re not made for commuting or average driving. A BMW is designed for people who find their thrills in fast accelerations and brag for days and nights about their tight turns, and that driving experience comes at a high price.

BMW has its own rear-wheel-drive platform, which delivers a well-balanced performance without sketchy handling on the front tires.

If you’re one for rugged roads, BMW had you in mind when they made the xDrive system.

The system distributes the power to 40% to the front and 60% to the rear. That way, you get better traction on the road without skimping on the driving quality.

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Of course, the smooth driving experience comes at a high price, which is my BMWs are so expensive.

6. Luxury: Promised and Delivered

BMW promises luxury and delivers it. Starting with the interiors, BMW either uses Sensatec, Dakota, or Nappa leather. The cheaper models will have Sensatec interiors, which, by the way, is vegan leather.

Go over the $50,000 mark, and you get lush interiors made of real leather. You can even choose Merino leather, which is a notch better than Nappa, being the most luxurious BMW offers.

Moving on to the vehicle’s exterior, BMW uses carbon fiber and high-end metal sheets. Carbon fiber is known for its lightweight and durability, and it’s mostly manufactured by hand.

Put those above the water insulation, sound-proof properties, and high-quality paint, and you get a legit reason why the cars are expensive.

7. Fuel Economy: Efficient Dynamics Package

An expensive car that helps you save money, wouldn’t you buy that? One reason BMWs are so expensive is that they save you money in the long run.

In 2007, the manufacturers developed a new concept: EfficientDynamics Package. The new strategy includes optimizing BMW cars to consume less fuel yet keep offering a seamless performance.

The manufacturing strategy covers both the vehicle concept and the driving system, and it’s used in every BMW car.

The EfficientDynamics Package is unrivaled in the vehicle market, which is one reason BMWs are more expensive than most similar brands.

8. High-Tech: ConnectedDrive

Driving at 60 mph on a highway doesn’t mean you should be disconnected from the world around you, and BMW knows that.

In 2008, BMW developed ConnectedDrive, which is a technology meant to keep you connected to the world through a sim card that connects you to a multitude of apps and services.

The ConnectedDrive technology offers three services: the BMW Connected application, Digital Services, and Driver Assistance Services.

The BMW Connected Application allows you to lock and unlock the car using your smartphone, as well as adjust climate control, flash headlights, and sound the horn.

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Meanwhile, the Digital Services includes four services: My Assistant, My Journey, My Car, and My Life.

As for the Driver Assistance Services, it includes Intelligent Parking, Intelligent Driving, and Intelligent Vision.

All those high-tech services provided by BMW take the cars’ prices up a notch. Typically, cars with no such services cost much less.

9. Safety: Fewer Hits, Fewer Maintenance Costs

When it comes to safety, some brands are a no-go. In 2021, Subaru and Volkswagen took the cake for being the brands with the most accidents in the US.

That doesn’t say anything about their quality, but it says a thing or two about their safety features.

Needless to say, BMW is a step ahead of the competition. Trust the Germans to always go beyond to ensure the rider’s safety.

BMW cars come with plenty of safety features to minimize the chance of accidents. To begin with, there’s the Parking Assist, Hill Start Assist, and Emergency Brake Assist.

If you want to go the extra mile, you can buy one of the newer models that come with Daytime Pedestrian Detection.

On top of that, all new BMWs come fully equipped with Active Driving Assistant, which is a package that includes Lane Departure Warning, Frontal Collision Warning, and City Collision Mitigation.

The abundance of safety features in BMWs is one reason they’re so expensive.

To learn more, you can also read our posts on why Tahoes are so expensive, why Volvos are so expensive, and why Mercedes are so expensive.

The Final Verdict

So, why are BMWs so expensive? Because of their unrivaled interior quality, solid safety features, a broad selection of vehicles, and the seamless driving experience they offer.

A lot of brands make sleek cars, but they’re worth nothing under the hood. BMW achieves both seamlessly, taking center stage wherever it goes.

It may be expensive, but it’s worth every dollar.

Author

  • Bruce Coleman is a diesel mechanic and car tester with 20 years of experience. He's a member of various vintage car clubs, and he loves restoring old motorbikes.

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