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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 Automobile Magazine
2005 Chrysler 300, Ford Five Hundred, and Toyota Avalon ComparedBy Rusty Blackwell / Photography by Stuart Fowle, Mike Dushane /
Article provided by: Automobile Magazine
The realities of teenagers and clients are getting in the way of your mid-life crisis plans. You need something roomy and safe. But you're not dead yet, so you want a little driving excitement and flair in a car that's not going to cost you your collection of Thriller-era Michael Jackson-worn gloves. We examined three of the newest and best full-size family cars under $30,000 through our speed-obsessed lenses. We tested well-optioned cars: the Chrysler 300 Touring, the Ford Five Hundred Limited, and the Toyota Avalon Touring. The Chrysler and the Toyota Touring packages were mid-level offerings for the models, while the Limited was the top trim option currently offered on the Five Hundred. Despite that, the Ford sported the least expensive as-tested price at $27,390 as delivered, with only front-side and side-curtain air bags chosen as options. The Chrysler came in next at $28,865, which included a power moonroof and Sirius Satellite Radio. Our Avalon wore a $30,669 sticker price and was optioned with an anti-theft system, a power moonroof, a six-disc in-dash CD changer, and carpeted floor and trunk mats. Factor in the incentives currently offered on domestic cars, though, and the transaction prices of the Chrysler and Ford models undercut the Toyota even more. Overall, we found the Chrysler and Ford entrants much improved since their most recent marque predecessors (the LHS and the Crown Victoria, respectively), but they're not yet on even ground with the Toyota from a quality standpoint.  From the OutsideThe exterior of the Chrysler is the most interesting of the bunch, and based on the sales success of the car, we're not the only ones who think it looks cool. We chose the 300's V-8-engined brother--the 300C--as our Automobile of the Year for 2005, and the extroverted looks and presence of the car influenced our choice. Styling-wise, the 300 makes the most confident and bold statement of this group, and we appreciate that. The Five Hundred and the Avalon have inoffensive (read: boring) appearances that may make them popular with less-adventurous buyers. We find their conservative approaches largely uninspiring, however. The Avalon had a bit of coolness to its jagged rear-end lines and graphite-colored wheels, but our interest peaked there. Ford has begun offering meaner grille inserts for the Five Hundred to help add some flavor to the over-rounded shape, but it still falls short of distinction in our eyes.  Looking InAll of these cars feature ample interior and cargo space for four adults and a good chunk of their gear. Each car seats five, but quarters might be a bit too tight for three full-size folks in the back seat during longer trips. All three sedans boast similarly roomy measurements for head and leg room in the front and rear seats; the back seats in each car could qualify as approved make-out territory for high schoolers, no doubt to the chagrin of their parents.The 300's cool exterior styling unfortunately causes the inside to have some shortcomings. Even with the large sunroof and competitively sized cabin, the interior often feels dark and small as a result of its smallish windows and consequently limited visibility, especially through the short rear window. The darkness can't hide the Chrysler's poor-fitting trim pieces and mediocre materials less attractive than those in the other cars. A perfect example is the down-market center-stack trim piece, which is covered with a chintzy (compared with the Ford and the Toyota) interpretation of Cyclone fencing. The seats, however, are probably the weakest part of the Chrysler's interior, as they are covered in an unattractive and slippery vinyl-like surface and felt a bit over-firm during lengthy drives. ... >>next page
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