New Car Options Are Like Custom Homes and Renos

A few days ago, I went to a car dealership.  I’m not looking for a new car, but I was interested to see what the new 2013 models looked liked.  One of the vehicles on the showroom floor was an entry level luxury sedan that started with a base price of $39,500.  With various options – leather, navigation, technology, hybrid engine – the car topped out at $53,200.  Regardless of the options and the price, the exterior of the car was almost exactly the same – you couldn’t tell the difference between the base model and the car that costs 35% more.

Custom homes and home renovations are like that new car.  The house may look exactly the same on the outside – same design, same stone and brick finish.  Yet one costs $200 per square foot to build, and the next one may cost 35% more – $270 per square foot.

What’s the difference? Just like the car, the inside of the house has things you can see, and things you cannot see that affect the cost of the house.


The upgraded car had a different engine, and different technology features such as navigation, traction control, collision avoidance, heated seats – things you generally can’t see, but you can feel.

Similarly with a house, the standard house will have a 90% high efficiency furnace, and fiberglass wall insulation, and standard heating, plumbing and electrical systems.

The upgraded home will have a dual stage 98% efficient furnace, heated tile floors, spray foam wall insulation, smart home wiring, and additional plumbing required to bring water to the rain shower and the body jets in the spa shower.  These are mainly things you can’t see, but all of them are things that improve the comfort level and enjoyment of the home.


In a car, these are the things you can see – the leather seats, the wood grain steering wheel.   In a house, these are the types of floors, the kitchen cabinets and countertops, the plumbing fixtures.

The standard production built home will have mainly carpeting, laminate kitchen countertops, and standard plumbing and electrical fixtures.

The upgraded home will have contemporary kitchen cabinets, quartz countertops, high-end plumbing and electrical finishes, hardwood floors – the list goes on and on.

So what’s the lesson here? 

Firstly, there are endless options to improve the look and comfort of the home. Anything and everything can be upgraded, and each upgrade or option has a cost associated with it.  You have to look at what you need, what you want, and what you can afford, and make a decision based on that.

Secondly, when it comes to pricing a custom home or basement finishing, price per square foot is a meaningless comparison, unless you are comparing exactly the same house, designed, built and finished exactly the same way.