|
|
|
|
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.
|
|
|
|
|
|
|
Review From Motor Trend Magazine
First Look: 2007 Honda Fit
Personal Gym: Proof That Honda's In Good Shape
By Ron Kiino
Photography by the Manufacturer
You May Have noticed the following two trends in the auto biz: (1) Honda is on a serious roll, winning MT's Car of the Year award with the all-new, eighth-generation Civic as well as our Truck of The Year trophy with its first pickup, the Ridgeline; and (2) The subcompact segment--you know, that small-car class in which Honda used to dominate with the now-compact, upscale Civic--is experiencing a resurgence, thanks to such newcomers as the Toyota Yaris and Nissan Versa along with the current crop that includes the Chevrolet Aveo, Hyundai Accent, Kia Rio, and Scion's fraternal twins, the xA and xB. A decade ago, experts were writing off this segment, what with low gas prices offsetting the notion of high fuel economy and SUVs selling like cotton candy at Disneyland. Bigger was certainly better and smaller hardly mattered. Now, though, with gas prices hovering around $3 a gallon and large sport/utilities garnering more scowls than Jacko at a PTA meeting, bigger is just bigger and smaller matters, uh, big time. Indeed, many of those experts are now singing a different tune, with some predicting the subcompact segment will grow more than 58 percent by 2010. So where does Honda fit into this boom? Honda, never an automaker to ice a hot streak, will seemingly fit in just fine. It's getting back into the subcompact game with the all-new Fit, a wedgy five-door that, for around $14,000, slots below the Civic and represents a new entry point into the lineup. The Fit is a world car, which means Honda's already been selling it in Europe, South America, and Japan, and to date, has sold over one million worldwide. In America, Honda hopes to sell 50,000 per year.  Based on a day of driving Malibu's hilly coastline, we're inclined to believe Honda may be selling itself a bit short with that sales projection. The Fit, available in standard and Sport trims, brings lofty levels of refinement and utility to the segment. Like all Hondas, it comes better equipped than Heidi Klum, with ABS, six airbags, a 160-watt CD audio system, A/C, five cupholders, and power windows, mirrors, and door locks. The higher-rent Sport adds 15-inch alloys, a rear spoiler, foglights, a leather-wrapped steering wheel, and a 200-watt stereo.
|
|
|
|
|
2007 Honda Fit
The Fit is Honda's answer to the Nissan Versa and the Toyota Yaris, which are also brand-new this year: it's small and cheap, with a base price pegged at between $13,000 and $14,000. The five-door is,...
more
|
|
|
|
|
|
|
|
|
|