I hate carpet in basements or any where else for that matter .We live in Canada pretty cold winters our full walkout basement has LVP we installed ours over dri core to help with the cold floor . We have huge dogs that use a doggie door all day into a big dog run inaall kinds of waether , at the end of the day a quicj sweep and maybe a damp mop the floors look like new and they are 15 yrs old . So my vote LVP and area rugs .

For me, since budget isn't an issue, it all comes down to your personal preference & the right sub-floor. We had W2W carpet in our previous basement and now have LVP and large area rugs. We also live in a cold winter climate so I understand your concerns but I must say, I now appreciate the versatility of changing out an area rug should the need arise vs. having to rip out W2W carpet (stains, water, etc.). Also, keeping the perimeter of the basement rooms clean/dust free is much easier with the LVP and area rugs than it was with W2W carpet but again, it all comes down to personal preference.

I also have LVP in my basement in a cold winter climate. I installed it two years ago before we moved in. It replaced carpet that had been there 10-15 years and was very dingy, especially where there are traffic patterns. Now we have area rugs in the TV area and in the home office, the rest is just LVP. I think the LVP will wear better than carpet.

Before you enclose all the walls and ceiling, make sure the distribution of ducts is appropriate for the space. That being said, basements are cold because they're the lowest part of the house and cold air always flows down. I have a small supplemental heater that I run if I get cold. In the summer I close the vents almost completely so the A/C doesn't cool the basement too much.

No carpet in the basement. Even if you don't have water outright in the basement, basements are damp = mold/mildew under the carpet. Do the LVP with area rugs. I'd check into whether a moisture barrier is needed beneath the LVP -- for the same dampness reason. (it's just inevitable -- I've never lived in a house where there wasn't some level of dampness in the basement).

We finished our basement 3 years ago and used LVP. We have big area rugs defining each area. No issues with cold floors…. same positives as above….. can change out rugs and can clean the LVP much easier than carpet. We did insulate really well with XPS foam board, spray foam, Rock Wool. We actually keep most registers closed down there. Nice and comfy!

Thank you all for your great feedback! We talked to our contractor and will be going with LVP with dimple underlayment to help with cold and feel under feet when walking.

Hoping for the best!

Just a heads up. It's interesting that your contractor is advising you to use an underlayment with luxury vinyl plank. We did a lot of shopping and studying before purchasing our LVP. Adding an underlayment voided the warranty, in most cases, if not all.