Chinese students at Purdue snapping up luxury cars

Along with locals who cruise around in the luxury car brands, they're the favorites of international students who can afford to dish out $30,000 to more than $100,000 on a vehicle.

Lafayette salespeople say that population is largely made up of Chinese students whose parents are wealthy and are happy to provide their children with the money to drive a high-end car while studying in America.

"There are many Chinese students here who will purchase cars from me," said Yuchen Zhang, who sells Mercedes-Benz vehicles for the Mike Raisor Automotive Group in Lafayette.

Zhang understands his audience well—he's from Shanghai and graduated from Purdue in 2014.

He markets to students by putting up posters in Chinese restaurants near campus and by communicating deals and incentives via WeChat, a social media app widely used in China.

Chinese student customers typically spend $30,000 to $40,000, he said, but the really rich will dole out more than $100,000 for a Lamborghini or Maserati.

Those prices might make some Americans clench their wallets, but they're a lot lower than in China. There, a luxury car costs two or three times as much as it does in the U.S.

The phenomenon isn't unique to West Lafayette, either.

CNW Marketing Research found that Chinese students at U.S. high schools, undergraduate and graduate institutions purchased about $15.5 billion in new and used vehicles from January 2012 to October 2013, Bloomberg reported. A comparable American group spent $4.7 billion on vehicles.

Some Chinese students want to get a luxury car as soon as they land in Chicago, said Cesni Ennis, a client adviser for Bill DeFouw BMW in Lafayette.

But, she said, some unauthorized dealerships that target the high-end luxury car market will try to get as much money as they can out of the students.

"There are a lot of unscrupulous businesses who take advantage of these kids," Ennis said, noting she's seen Chinese customers come in with salvaged titles or bad Carfax.

She also sees some students who are ready to shell out as much as they can.

"It doesn't end with one incredibly nice car," Ennis said of an elite group of youths who will buy multiple luxury vehicles.

In China, those young people are referred to as "fuerdai," the country's second generation of the rich. Their spending habits are looked down upon by the Communist Party, which has tried to educate the group on traditional Chinese values.

Some students will even abandon their cars after graduation, she said.

Zhang said many will sell them back to the dealer or to other students, but at a much lower cost.

"Usually they lose a lot of money because they want to get rid of them soon because they're going back to China," he said. "Some students also aren't good drivers and they're not familiar with the winter weather here so they will damage their cars (and) it will also depreciate the cars."

But just as income differs across households in the U.S., not all Chinese international students can afford a Beemer.

Purdue student Bobby Wen, for instance, travels solely by bike and is paying his uncle back for his tuition fees.

His parents own their own business back in Beijing, but they cut him off when he turned 18, Wen said as he bit into his Subway sandwich he bought with a coupon.

He knows of some students who are ultra-wealthy, but said he doesn't hang out with that clique.

"I would like to have my kids in that group, though," he laughed.