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Luxury car is a term that is widely used, but does anyone truly know what it means? When it comes to cars, luxury is in the eye of the beholder. What a car dealer's ad touts as luxury may be different from what a car rental agency categorizes as a luxury car, and both may conflict with your personal perception of what a luxury car is.

In economics, a luxury item is one that is in higher demand among people with higher incomes. A luxury car is a status symbol, and status varies depending upon the socioeconomic or demographic group to which is applies.

A luxury car may simply mean a high-priced car. A luxurious car may not necessarily be considered a luxury automobile. For example, because of its high price, a Hummer is often considered a luxury car, even though the original Hummers are heavy duty military trucks without emphasis on comfort.

A luxury car may also simply be an automobile made by a manufacture known for making luxury automobiles, even if the specific vehicle is less expensive than its usual models. For example, all models of Mercedes and Jaguars are considered to fall into this category, even the least expensive versions.

Most people would agree that an automobile costing more than $100,000 would be considered a luxury automobile. Almost all cars made by Rolls Royce and Bentley, for example, fall into that price range. Exclusivity is on of the few agreed characteristics of a luxury vehicle.

Typically, luxury automobiles enhance comfort and operation. Leather, adjustable, heated seats are an example of luxury appurtenances. High-performance vehicles such as sports cars, for example Corvettes and Vipers, are prestige autos, but not everyone would call them luxury vehicles. An automobile may be luxurious by virtue of its amenities and its comfort level without being expensive, even though to most people a luxury means something they really can't afford.