The other day, I walked by the front gate of one of the wealthiest parts of San Francisco. Houses in the area routinely sell for $10 million or more. When I peered inside the gates, I saw beautifully manicured lawns and sprawling mansions. What was surprising, however, was the absence of something from the scene.
When I looked in the garages of these mansions, I couldn’t find a single sports car. The vehicles ranged from luxurious to practical, but none of them were ostentatious. When I got home, I looked at an article detailing the vehicles of billionaires, and I was similarly stumped by the lack of sports cars — only 1 in the 12 billionaires on the list drove a flamboyant supercar [1]. Don’t get me wrong, billionaires often drive extremely expensive luxury cars like Maybachs or Bentleys — but these types of cars fall into a different category than your stereotypical glitzy convertible.
So why don’t the ultra-rich drive Ferraris? Was I just looking in the wrong place? Oddly enough, I found other articles supporting my hypothesis — there have been multiple articles compiled about billionaires driving modestly priced cars [2]. But when you think about it some more, this isn’t all that surprising.
Sure, supercars are a symbol of wealth. But, what kind of wealth do they really signify? When you think about it, a sports car suggests that someone is wealthy enough to spend a few hundred thousand dollars on their mode of transportation. Given that most people spend around 15% of their income on transportation [3], a sports car really only suggests an income in the low millions. So a billionaire would not drive a sports car solely for the ostentatious display of wealth, since people would peg the billionaire to be poorer than he or she really is! For status symbols, billionaires gravitate towards yachts and houses, which can cost into the tens and hundreds of millions of dollars.
Because cars can no longer serve as a symbol of wealth, most ultra-wealthy people choose cars which are, well, the best at being cars. Mercedes, Audis, and BMWs are quite common since they are well engineered and dependable machines that are still luxurious.
Of course, it’s quite hilarious that billionaires are so indifferent to supercars, the most instinctive symbol of wealth [4]. But it does give an idea of the stratified world that some of these people live in.
By the way — next time you see a billionaire driving a Toyota, don’t automatically assume it’s out of frugality. He or she might just have a yacht parked out back.
References:
- Here, I use the term sports car to refer to an obviously gaudy, high performance car such as a Ferrari or Lamborghini. http://www.businessinsider.com/check-out-the-cars-the-worlds-richest-people-drive-2012-4?op=1&IR=T.
- See http://money.aol.co.uk/2014/08/13/billionaires-who-drive-astonishingly-cheap-cars/ or http://autochunk.com/9757/2014/10/24/celebrities-billionaires-surprisingly-cheap-cars/.
- See the Bureau of Labor Statistics’ table on average annual expenditure by major category of all consumer units for 2012: http://www.bls.gov/opub/reports/cex/consumer_expenditures2012.pdf.
- Or quite deplorable, depending on how you view inequality in the world (and of course whether you’re a glass a teeny bit full kind of person, or a glass almost completely empty kind of person).
