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Value Rating
Above Average
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.
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Article From Motor Trend Magazine
2006 Truck Of The Year Road Test: 2006 Lincoln Mark Lt
All Dressed Up, And Now, Some Place To Go
By Editors of Motor Trend
Photography by John Kiewicz, Brian Vance, Evan Wollenberg
Lincoln's second foray into the pickup market is a much better execution than its first. Remember the Blackwood? The Mark LT is a more down-to-earth design, with practical capabilities that allow it to work like a truck if needed, something the Blackwood wasn't able to offer. Based on a fully equipped Ford F-150 SuperCrew platform, the Mark LT is identical in structure. Included are the obligatory unique grille, badging, chrome accents, and wheel options--nice, but perhaps not differentiated enough to merit the Lincoln nameplate. There is enough interior opulence here to attract buyers wanting something other than a Cadillac Escalade EXT. Available in 2WD and 4WD, the Mark LT's most significant changes involve Ebony wood accents and a cream-color Nudo leather (black is available as well). The interior layout is similar to the F150's: split captain's chairs, flat-faced dash, center-console transmission shifter. Several testers, who hadn't driven the Mark LT before, expected a Navigator SUV-type interior, with its unique dash and satin-nickel finishes. Among this field of five-, six-, and eight-cylinder competitors, the Mark LT had the slowest 0-to-60 time of the bunch, although midrange power and passing abilities are fine. It's tuned for smooth highway driving. Unfortunately, the Mark LT had trouble keeping composed, evidencing axle-hop and front-end wander on rougher pavement and rutted dirt-road stretches. And the Lincoln's not cheap, starting at around $40,000 and climbing quickly. Ford aims to sell around 15,000 units. Big question: If Ford is sure there's a market here--and Cadillac seems to be doing well with it--why not inject some distinction (and more power) into a luxury-branded product that's supposed to make its buyers feel special? The LT serves as an uplevel trim package for the F-150, but does little else to justify the badge and the price. (related content) 2006 Truck Of The Year Road Test: Truck-Hunting Season Opens This Year With All-New Rulebreakers - And Even Tougher Game. Get the Full 2006 Truck Of The Year Story Here! |
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