|
|
|
|
IntelliChoice Value Rating
The chart above shows the purchase price versus ownership cost for each car from a specific vehicle class. The cars with better than average ownership cost/purchase price correlations are the best values, and these best value cars are represented by the dots below the curve. (i.e. the cars that have a lower ownership cost compared to its purchase price.) Those cars, which are worse than average or poor values, appear above the curve.
One way to view the graph is to draw a vertical line through any purchase price. You may see several dots that fall on this line - each of which is a car with a similar purchase price. However, notice the difference in ownership costs of each car represented by the vertical position of the dot. Two cars with the same purchase price can have thousands of dollars difference in ownership costs. This is what separates "good value" cars from "poor value" cars.
What is a good car value?
A "good car value" is one whose cost to own and operate is less than expected. The lower the cost to own and operate a car compared to what is expected, the better the value of that car.
But how do we know a car's "expected cost"?
For each car in the class, IntelliChoice plots the car's purchase price against the total five-year cost to own and operate it as determined by IntelliChoice research. Each dot on the above chart represents a specific car. Generally, we find that as the purchase price of the car increases, the cost to own and operate that car increases. This is why the dots on the graph tend to rise upward and to the right. This phenomenon also makes intuitive sense - as the purchase price rises, financing costs tend to rise, as do insurance, depreciation, taxes, and most other car ownership costs.
This is an important concept. It's normal for car ownership costs to rise as purchase price rises. Therefore, we can't just establish one "average" ownership cost number for each class, since cars in the class have different purchase prices. (This is why the "Relative" shown on each chart is different for cars in the same car class.)
Using statistical techniques, IntelliChoice "connects the dots" to form a curve that defines, for this car class, the relationship between the car's purchase price and car's ownership costs. This curve is our "expected cost" curve. The curve defines, for any car in the class, the five-year ownership cost that we would expect to see at each possible purchase price. If every car in the class were an average value, then all the dots would fall exactly on the curve. However, it's rare that any dot is exactly on the curve. Some dots are a little higher or lower, and some are a lot higher or lower. The dots that are a little lower are better than average car values, while the dots that are a lot lower are excellent car values (A dot that is a lot lower than the curve has ownership costs much lower than expected for a car of its purchase price). Conversely, a dot a little higher than the curve is a poorer than average car value, while a dot that is much higher than the curve is a poor car value.
Value is a relative term, not an absolute term. It is performing better than the logical expectation.
So is a Mercedes-Benz E320 expensive to own and operate? Certainly in an absolute sense. Most other cars cost less. But, when its cost to own and operate is plotted against cars with comparable invoice prices, the E320 costs less. So the E320 is not expensive to own and operate - it is a good car value. The Mercedes does not have low ownership costs, but it has low ownership costs for its invoice price.
|
|
|
|
|
|
|
Article From Motor Trend Magazine
2006 Motor Trend COTY Contender: 2006 Volkswagen Passat
Robust? sure, but where's the mustard?
By Editors of Motor Trend
Photography by John Kiewicz, Brian Vance, Evan Wollenberg
The all-new Passat entered this year's contest with some of the strongest credentials in the field--a 3.6-liter, 280-horse V-6, a six-speed automatic, 0 to 60 in under six seconds, and a quarter-mile trap speed of over 100 mph. For a family sedan, the Passat possesses the goods of a musclecar. Yet despite its robust qualifications, the Passat failed to make it to the second round of 10. So what gives? All of the Passat's spanking power seems to have supplanted the refinement that made its predecessor such an engaging car. For instance, corralling the new car's 280 ponies through the front tires, especially during acceleration testing, proved to be a frustrating exercise in moderation. As a result, maybe a Passat 2.0 would have fared better, especially since its seamless and torquey 197-horsepower turbocharged direct-injection four-cylinder would've lessened the weight without sacrificing much of the off-the-line, around-town oomph. Second, the Passat's front strut/rear multilink suspension felt spongy at times, resulting in excessive body roll. And whereas past Passats seemed like Audis with cash on the hood, the new car felt more akin to a scaled-down Phaeton that underwent cost-cutting. Our tester, a loaded V-6 front-driver, possessed an interior that didn't strike us as richer than its predecessor's. That said, the new Passat 3.6 does pack a punch when it comes to standard equipment, which includes a power sunroof, 17-inch wheels, an in-dash six-CD changer, six airbags, a tire-pressure-monitoring system, and stability control. In the bang-for-the-buck department, the Passat doesn't disappoint, delivering lofty levels of acceleration and accessories. It simply lacks that Teutonic passion and character that would've made a Volkswagen our Car of the Year.
|
|
|
|
|