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The Asphalt Jungle: Sweet & Low

Below is an enthusiast article written by the automotive experts at Motor Trend. Back in the Paleozoic Era--when trilobites flourished, the first amphibians squiggled from the seas, and I was a boy--American families drove station wagons.

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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

The Asphalt Jungle: Sweet & Low - SUVs and crossovers attempt to drive like wagons, but it's a tall order

/ By Arthur St. Antoine / illustrators: Nigel Buchanan
photographer: Lionel Deluy
/ Article provided by: Motor Trend Magazine

Back in the Paleozoic Era--when trilobites flourished, the first amphibians squiggled from the seas, and I was a boy--American families drove station wagons. Our tribe of six jumped right on the wagonwagon, sweating through the late sixties in a Volkswagen Squareback, briefly living large in a used 1974 AMC Ambassador Brougham, then downgrading to a new Ford Fairmont so utterly lacking in curves and decoration it couldn't be seen on radar.

The thing is, back then this actually mattered; being seen in the right wagon carried serious prestige. And our lowly Fairmont was not theright wagon. I'd drool with envy whenever myfriend arrived at school stretched out in thethird row of his mom's Oldsmobile Vista Cruiser,a wheeled plesiosaur so extravagant it had anactual-size photograph of a redwood tree gluedto each flank, a windowed roof dome liftedfrom an Amtrak observation car, and so manypower conveniences the driver's door had amail slot for receiving electric bills. Someday, Ivowed, I'd be Vista Cruising, too.

Then, like "Miami Vice" pastels and MichaelDukakis, wagons disappeared. From roughlyone million wagons sold in 1980, U.S. salesplummeted to just 400,000 units in 1990 and amere 120,000 last year. A host of worthy modelshave ceased production--including the ToyotaCamry, the Mazda6, the Dodge Magnum, andeven the Subaru Legacy. Compared with thepitiful approval ratings for wagons, the presidentseems beloved enough to run for president.

Much of the blame for the wagon's demise,of course, owes to the SUV boom. In the early1990s, for reasons Freud could probably bestexplain, people who had no need for truck-basedsport/utes --- they never drove off-road,never towed large trailers --- started snappingthem up, mostly in a bid to keep their headsabove each other ("I'll see your Chevy TahoeEmpire State Edition and raise you a FordExpedition Sears Tower Series"). Rising gasprices have since purged many pretendersfrom the SUV-buying pool, but Americans stilllike to see eye-to-eye with bus drivers. Today,though, most can be found in the tall saddles of"simulated SUVs," aka car-based crossovers, salesof which nearly tripled (to 2.8 million annually)from 2001 to 2007.

The public's penchant for sitting in adulthigh chairs is curious -- especially since, asany driving enthusiast knows, a lower seatingposition and center of gravity provide superiorcontrol and responsiveness. This point hit homerecently when I spent a week driving the new2008 Volvo XC70, one of a handful of wagonsstill available stateside. True, the XC70 has someSUV-like features --- including four-wheel driveand 8.3 inches of ground clearance --- but itsports unmistakable wagon styling and, at 63.1inches high, it's three inches shorter than, say, a Lexus RX 350 crossover (the regular V70 is morethan two inches shorter still).

It takes only a few moments behind thewheel of a car to appreciate how nice it is todrive, well, a car. Trucks have their utilitarianroles to serve, and crossovers become morecarlike every year, but only a true automobiledelivers that satisfying, hovering-over-the-roadride and the ability to arc into swift cornerswithout leaving your roofline a generous tip.What's more, a nice car cabin looks betterthan most SUV cockpits. Not only is the XC70gorgeous inside (picture a Bang & Olufsenstereo with a steering wheel), it offers tons ofcargo room --- more than 72 cubic feet --- and alow, easy-access load floor.

Even a Michigan snowfall didn't make meyearn for an SUV. In fact, judging by the XC70,wagons have never been better. They're evencompletely free of trilobites.