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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
Newcomers: 2008 Hummer H3 AlphaSize matters / By Matt Stone /
Article provided by: Motor Trend Magazine
We had a saying for the original 3.5-liter five-cylinder H3: "It may be expensive, but it sure is slow." The current 242-horse, 3.7-liter I-5 is better, yet still not the answer. But nothing cures a power shortage like a small-block Chevy V-8, in this case the 5.3-liter version good for 300 horsepower and 320 pound-feet of torque. It's smooth and sounds great, while 0-to-60 times drop from the previous 11.1 to nine seconds flat. The V-8 is still backed by GM's yestertech four-speed automatic trans, but it works fine, proving a good dance partner for the big motor. The rest of the Alpha package consists of tootsed-up trim and higher equipment levels, including terrific leather-trimmed, power/heated seats, and a rockin' Monsoon audio package. Although the H3's underpinnings are horse-cart basic (ladder frame, leaf springs, live axles), its ride quality is better than expected. The body structure is drum-tight, with no squeaks and rattles to be heard. The new powertrain does wonders for the H3, but poses a question: Why now would someone bother with the heavier, thirstier, not much roomier, more-expensive H2? | 2008 Hummer H3 Alpha | | Base/tested price | $39,260/$41,745 | | Drivetrain | Front engine, 4WD | | Engine | 5.3L/300-hp/320-lb-ft* (SAE Certified) OHV V-8 | | Transmission | 4-speed auto | | Curb weight (dist f/r) | 5004 lb (51/49%) | | Length x width x height | 186.7 x 85.5 x 74.5 in | | 0-60 mph | 9.0 sec | | Quarter mile | 16.8 sec @ 81.5 mph | | EPA city/hwy fuel econ | 13/16 mpg | | CO2 emissions | 1.37 lb/mile |
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