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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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Article From Motor Trend Magazine
The LR3's crept up a bit in price, about $5000 more than a comparably equipped 2004 Discovery. Most of this is a consequence of current dollar-to-pound exchange rates, but understandable considering the added value of the 300-horse Jag-based V-8, six-speed ZF automatic transmission, adjustable air suspension, electronic four-wheel-drive aids, and increased interior space. And the tariff--$44,995 for the base SE and $49,995 for the uplevel HSE--seems justified when you take the LR3 for a spirited highway run. That's right, the new Land Rover feels as much at home making time on twisty blacktop roads as it does perambulating up rocky trails. Head toss, a bane of the old Discovery's live axles, is put to rest courtesy of the LR3's cross-linked independent air suspension. When a bump forces a wheel upward, air is routed to the opposite wheel on that axle, applying an equal and opposite force and improving wheel contact.
Real-time road-surface monitoring continuously adjusts the stiffness of the air springs depending on conditions. The LR3's stiff, hydroformed ladder frame is robust; expect no creaks or groans when tiptoeing over boulder-strewn terrain and certainly none when traversing cratered pavement, angling up steep driveway ramps, or negotiating speed bumps diagonally. Put it all in motion, and the chassis feels planted, quiet and secure at highway speeds, as if the LR3's just graduated from Range Rover Finishing School. So whether your travels take you to the Temple of Doom or the takeout line at Tad's Tofu Tepee, the new LR3 brings Range Roverlike capability and sophistication to Land Rover's mainstream offering--and does so for about $30,000 less. Terrain Response System --R.S.
 Imagine a roadgoing sedan with a rotary dial on the dash that adjusted the workings of the car for different situations--freeway gridlock, Mulholland Drive, Sunday outing with mother-in-law, and Gumball Rally mode are just a few that spring to mind. Well, Land Rover's now done this for off-road driving. The LR3's Terrain Response System customizes the electronic throttle curve, gearshift points, air suspension, ride height, steering boost, stability control, and Hill Descent Control settings into five programs you control by twisting a rotary knob. It recognizes the fact that not all off-road driving is the same. Like a modern SLR camera with selectable shooting ranges, Terrain Response breaks down off-road driving into General, Grass/Gravel/Snow, Mud & Ruts, Sand, and Rock Crawl modes. For example, Rock Crawl is all about pinpoint throttle control and smooth torque application, whereas the Sand setting sends full power to the wheels and delays upshifts. Sorry, there's no Temple of Doom mode. ... >>next page
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