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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 Super Street Magazine
2002 Ford Focus SVT - Serenity NowAcura RSX Type S Meets Ford Focus SVT / By Ricky Chu / photographer: Jonathan Wong /
Article provided by: Super Street Magazine
There are some days when we sit in the office and think back about the good ol' days; back when cars were all about American muscle versus Japanese technology. Things like the enchanting gargle of a finely tuned carburetor and the silent bliss of a fuel-injected engine. Wait a second, this isn't right at all. All that rivalry nonsense was way before our time, back when Chevy Chase was actually funny. People who have been stuck on swampland timeshare properties for the past 20 years would have a hard time recognizing these cars. American cars are getting smaller and more efficient,Japanese cars are getting bigger and using larger- displacement motors, and Betamax isn't the hottest thing to hit the shelves anymore. Today, it isn't so absurd to put a Ford Focus SVT and an Acura RSX Type S side by side. Not to battle each other in a day of grueling track testing, but to make note of how much the automotive industry has evolved. It's uncanny how similar these two cars are to each other. Both cars use 2.0L displacement, high-compression motors, and six-speed manual transmissions. Ford's Focus SVT yields slightly less power than Acura's RSX Type-S 170 hp to 200 hp. With technology such as Zetec and iVTEC available, variable valve timing is no stranger to either car. Weight is always a big issue; these cars tip the scales at just around 2,700 pounds. Front engine, front-wheel drive appears to be the driveline of choice. What's more important, length or girth? The 4 inches that the Focus loses to the RSX in length is made up by 2 inches of additional width. Appearance-wise, it's very difficult to say which car is going to get you more digits from the girlies. Futuristic-looking headlights and taillights can be found on both cars. With luxuries such as an in-dash six-disc CD player and metallic color gauges, driving either car makes you feel as if you're sitting in some type of space vehicle. Almost every spec we had on hand was close when comparing the cars. In fact, the only big difference we could find between them was the price. The RSX Type-S dents the wallet slightly more at $23,000, while the Focus SVT is available for $17,500. Sorry to burst your bubble, but after driving both cars for a week, we still can't come to a unanimous decision on which car we like better. It's almost like having to choose between prime rib and filet mignon. A decision of this caliber requires more than a flip of a coin. Actually, we want both cars. You can call us greedy or indecisive, but we'll be the ones rolling two pimp rides to party it up with the Butabi brothers at the Roxbury. Maybe we can impress the girls in the drive-thru lines that we spend more than half of our lives sitting in.
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