You're right: cars are a means to an end. The incremental value provided by a luxury car over a regular car is exceedingly slight, and ends up going negative when you compare long term maintenance and gas prices.
The entire problem with luxury cars is summed up in the word 'luxury': burning cash for social proof.
The incremental value is entirely dependent on the person buying the car. I've owned a mercedes for 8 years and when I drive other peoples cars I go crazy because of the little things I take for granted in my car.
The entire problem with luxury cars is summed up in the word 'luxury': burning cash for social proof.