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Value Rating
Above Average
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 Truck Trend Magazine
Motor Trend Magazine Names 2003 Sport/Utility of the Year
Motor Trend magazine has announced the selection of the Volvo XC90 as Motor Trend's 2003 Sport/Utility of the Year.
Motor Trend magazine has announced the selection of the Volvo XC90 as Motor Trend's 2003 Sport/Utility of the Year. The award-winning Volvo was unveiled at the opening of the 2003 California International Auto Show (CIAS) in Anaheim. The Caliper award was presented to Vic Doolan, President and CEO of Volvo Cars, North America. Motor Trend's editorial staff selected this year's winner from a field of 14 vehicles, after comprehensive testing and evaluation. Eligible vehicles were all sport/utilities that are new or substantially redesigned for 2003, and that will be on sale by January 1, 2003. Contenders included: the Ford Expedition, Honda Element, Honda Pilot, Hummer H2, Isuzu Ascender, Kia Sorento, Lexus GX 470, Lincoln Aviator, Lincoln Navigator, Mitsubishi Outlander, Subaru Baja, Subaru Forester, Toyota 4Runner, and Volvo XC90. "No other new sport/utility vehicle addresses our criteria as effectively as the new Volvo XC90," says Editor-in-Chief, Kevin Smith. According to the Motor Trend editors, "More than any other vehicle in the running this year, the Volvo XC90 moves the standard in its market segment...It drives comfortably like a sedan, tows like a tough pickup, off-roads like a rugged sport/ute, and moves bulky cargo or as many as seven people like a minivan." Accepting the award, Vic Doolan, President and CEO of Volvo Cars of North America said, "We set out to produce what would be the first in the next generation of SUV's - a vehicle that reflected Volvo's core values of safety, environmental care, great value - and above all, the XC90 is an SUV with a conscience. The Motor Trend "Golden Caliper" is a world-renowned award that we are thrilled to receive and is a testament to the fact that we really did achieve our design goals with this exciting new vehicle," he added. The complete report on the 2003 Sport/Utility of the Year will be published in the December issue of Motor Trend (on sale November 5). Multimedia coverage of the testing and selection process will appear on Motor Trend Television, hosted by feature editor John Matthius and aired on the Speed Channel in November, and heard on Motor Trend's syndicated weekend radio show (consult your local listing).
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