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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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Review From Motor Trend Magazine
Road Test: 2006 Porsche Cayman S, 2006 Chevrolet Corvette Z06, 2006 Porsche 911 Carrera & S, 2006 Aston Martin V8 Vantage
Dial 911: Let The Battles Begin
By Frank Markus
Photography by Evan Klein
What Is It About Porsche's 911? Any wet-behind-the-ears automotive engineer can fill a blackboard with figures and equations proving the venerable Porsche is, by design, an inferior sports car. Just look where the engine is, ferpetesake. It's hanging way out behind the rear axle, which makes for a disadvantageous polar-moment of inertia. That's geek-speak meaning the car inherently wants to handle like a lopsided barbell, swinging all pendulum-like in corners. Furthermore, the engine's mass actually teeter-totters weight off the front wheels, and any C-average enginerd can remember that the maximum grip a tire can deliver is the product of its coefficient of friction and the weight pushing down on it. Less weight equals less grip--another critical strike against the 911's cornering capability. Slavish devotion to a 43-year-old profile leaves no room out back for anything bigger than a flat-six, and unless you lay out six figures and order the X51 power package or wait for next year's Turbo, the water-boxer six only makes between 325 and 355 horsepower--far less than competitors costing a fraction of the 911's $72,095 opening price. Clearly the continuing popularity of the 911 can only be explained by the iconic image it enjoys and projects. But there's a helluva lot more to Porsche's icon than raw numbers and blackboard scribblings can illuminate. Four decades of advances in chassis tuning, tire technology, and electronic stability aids have apparently succeeded in overturning the laws of physics, rendering the 911 remarkably safe and simple to operate within its admirably high limits of adhesion. The rear-engine location magnifies the weight pressing down on the rear tires at launch, allowing the engine to convert more of its power and torque to acceleration off the line and less to tire smoke, improving sprint times accordingly. The light front-end loading endows the 911 with benchmark steering feel. The amount of data transmitted to the 911 driver's hands via tiny twitches and changes in weighting is virtually unmatched outside of an open-wheeled formula car. Package all the above in a cockpit where every pedal, switch, and lever has been uncompromisingly placed in the ideal spot--remember, there's no powertrain bulging into the cockpit jockeying for position with the controls--and you end up with a car that earns its icon status fair and square. This hasn't stopped seasoned automotive engineers from trying to outdo the 911, however, and these days Porsche's masterpiece seems to be under attack from all directions. America's Sports Car, the even longer-lived Corvette, has upped its game by an order of magnitude with the 2006 Z06 model. Does the new Chevy have what it takes to lure avid Porschephiles? Porsche alumnus Ulrich Bez is now commanding Aston Martin's slide-rule soldiers and CAD cadets, and his latest masterpiece--the new "entry-level" V8 Vantage is aimed squarely at the high end of the 911 Carrera S. Has Herr Bez transformed the stolid, tweedy British brand sufficiently to draw the attention of 911 customers? And as if the British and American competition weren't daunting enough, there's a nasty sibling rivalry brewing right there in Zuffenhausen. Porsche's slick new mid-engine Cayman provides most of what people love about a 911 at a better price, in a sleeker package, and without the inherent weight imbalance. So will the 911 be able to defend its crown as the world's sports-car icon? Let's load up our geek gear and consider the rivals...
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