The bubble hasn't just burst for luxury-car makers, it has evaporated.

As a result, expect common sense to make a comeback as consumers start living closer to their means, analysts say.

U.S. luxury-car sales, which plummeted 33.1% in November compared with like-2007, haven't seen positive territory since September of last year, according to Ward's data. Even deliveries of more affordable entry-level models, which account for most of the luxury segment's overall volume, have slipped.

Ranging in price from $28,300 to $41,800, according to Ward's segmentation, Lower Luxury cars recorded their fourth consecutive year-over-year sales decline in November. Tough times have caught up with entry-level buyers who overextended their credit in exchange for a taste of the good life.

“People felt pretty wealthy and they were able to easily pull money out of their homes and use their homes as an ATM,” says auto analyst Erich Merkle.

“In entry-level luxury, you've seen people that have crossed over from Honda to Acura and maybe Toyota to Lexus,” Merkle tells Ward's. If the lending climate had been less accommodating, “they may have stayed with a Toyota or a Honda,” he adds.

Because the fragile economy has made lenders increasingly wary, borrowing becomes more challenging, says Alexander Edwards, president of Strategic Vision, a California-based auto industry consultancy. So expect consumers to set their sights lower at “more practical, but nicely appointed vehicles.”

Edwards suggests the Chevy Malibu and Honda Accord may draw buyers who once coveted Cadillac and Acura models.

Of the primary luxury brands that play in the U.S., only Daimler AG-owned Mercedes-Benz and Tata Motors Ltd's Jaguar can boast higher year-over-year light-vehicle sales through November. They recorded gains of 1.3% and 1.2%, respectively, with the tri-star marque leading the way, according to Ward's.

“A lot of that has to do with product cadence and the fact they were introducing the all-new C-Class,” Merkle suggests. “It's doing very well.”

Historically, the luxury segment is “somewhat isolated” from periods of economic turmoil, Edwards notes. But the current downturn is “more severe,” erasing whatever insulation luxury-market players usually enjoy.

At BMW AG, the volume leader among U.S. luxury-market players, Management Board Chairman Norbert Reithofer concedes the industry is “without doubt facing some extreme challenges.”

Through November, BMW's U.S. car sales lagged like-2007 by 6.8%, according to Ward's data, which includes Mini-brand totals. But Ward's segmentation lists Mini vehicles as specialty products, not luxury. Without factoring in Mini deliveries, which were up 31.3% through November, BMW's car sales plunged 12.6%.

But in a statement accompanying BMW's third-quarter financial report, Reithofer says innovation is a key weapon in the fight against economic hard times.

Agreeing with that is Peter Boesen, who says his operations at South Bay BMW/Mini in Torrance, CA, have been somewhat insulated from the downturn.

“What has saved BMW is pre-paid maintenance,” says Boesen, vice president and general manager at the southern California dealership.

The auto maker's program offers free oil changes, brake pads, brake rotors, wiper-blade inserts and scheduled inspections for four years or 50,000 miles (80,000 km).

For many BMW stores, including Boesen's, Mini also was a savior. “The Clubman came out at the perfect time,” he says of the extended-version Mini Cooper that launched last spring.

Boesen's store had a 6-month waiting list for the Clubman.

As for the luxury market, Merkle says its halcyon days are over.

“We will see luxury come back,” he tells Ward's. “We'll probably be flat for next year and we'll start to come back from 2010, but I don't think we're going to get back to the pre-recession highs.”