Cutting Back: Wealthy Car Buyers Trading Down

Why are customers trading down? Some of it is because of the economy and even wealthier car buyers are more cautious. So instead of spending $80,000 they are more likely to spend $50,000 or $60,000. And given the technology and styling put into many of the refreshed "mid-level" luxury models customers don't feel like they are trading down.

For example, compare the BMW 5 series ($47,795) and BMW 7 Series ($71,895). Clearly, with the 7 Series, BMW buyers are getting a slightly larger sedan. An updated version of the car is rolling into showrooms this summer, but to quote one dealer, "The 5 series is so nice it made it very easy for the returning 7 series customer to downsize without a lot of compromise."

That ultimately may be what the slowdown in luxury cars over $75,000 is all about.

--Written by Phil LeBeau at CNBC