Getting the Most for Your Car Dollar

Peter Smith decided he was finally going to play it smart. The next time he bought a car, he told himself, he was going to buy the cheapest car he could find. That way he could trim his transportation costs to the bare minimum.

But a funny thing happened to Peter. He did buy the cheapest car he could stand to own, but four years later, when he decided he wanted a new vehicle, his old "cheap" car didn't turn out to be such a bargain after all. Why? Well, there might have been a variety of contributing factors like insurance rate, fuel economy, and maintenance/repairs, but the big pin that burst his financial bubble was depreciation. Over time the value of his "cheap" car plunged like a stone, while the value of others in the category held up far better. So not only did Peter end up driving a car he didn't particularly like for four years, he also found it cost him money. In the world of popular psychology, they call that cognitive dissonance. Peter called it a big downer.

So how do you avoid falling into the money pit that trapped Peter? Well, a simple way is to eyeball the data from IntelliChoice, a Primedia company that earns its keep poring over ownership and leasing cost data. IntelliChoice has just announced its 18th annual Best Overall Value of the Year Awards based value calculations on more than 1,000 vehicle model and sub-models. The analysis accounts for the price of a vehicle and the accumulated costs of depreciation, maintenance, repairs, fuel, fees, financing, and insurance and projects what these costs will be for the upcoming five-year ownership cycle.

As well-defined as all this sounds, there are a couple of cautions: first, Intellichoice's value calculations are based on a five-year term of ownership, so if you plan to keep your car, say, eight years, the value calculation can be significantly different. And since over the course of five years the predominant "cost" for most vehicles is depreciation, if Intellichoice's estimates of depreciation turn out to be erroneous, the company's value estimates will be wrong as well.

Okay, with the disclaimers out of the way, let's get to this year's award winners. The Best Car Value under $24,000 is the Honda Civic DX sedan, while the Best Car Value over $24,000 is the Toyota Avalon sedan. Both cars parlay relatively low purchase price, high resale value, and low maintenance and insurance costs to take the titles.

Toyota wins another award with the Toyota Tundra regular cab, the Best Truck Value under $27,000. A domestic model does the trick as the Best Truck Value over $27,000 -- Chevrolet Silverado C1500 LS extended cab. Toyota-built vehicles seem to reign over the SUV category. The Best Sport Utility Value under $30,000 is the Toyota RAV4, and the Best Sport Utility Value over $30,000 is the Lexus RX 330.

In addition to the six category winners, IntelliChoice also recognized the following vehicles as class winners:
    Cars:
  • Subcompact Class - Honda Civic Coupe
  • Compact Class under $17,000 - Honda Civic Sedan
  • Compact Class over $17,000 - Honda Civic Hybrid
  • Midsize Class under $21,000 - Toyota Prius
  • Midsize Class over $21,000 - Honda Accord Sedan
  • Large Class - Toyota Avalon
  • Near Luxury Class - Lexus ES 330
  • Luxury Class - Lexus LS 430
  • Small Wagon Class - Toyota Matrix
  • Midsize/Large Wagon Class - Subaru Legacy
  • Base Sport Class - Mazda Miata
  • Sport Class - Acura NSX
    Sport Utilities:
  • Compact Sport Utility Class under $21,000 - Toyota RAV4
  • Compact Sport Utility Class over $21,000 - Honda CR-V 4WD
  • Intermediate Sport Utility Class under $31,000 - Honda Pilot
  • Intermediate Sport Utility Class over $31,000 - Lexus RX 330
  • Full-Size Sport Utility Class under $38,000 - Chevrolet Suburban 2WD
  • Full-Size Sport Utility Class over $38,000 - GMC Yukon XL 4WD
    Trucks:
  • Compact Pickup Class 2WD - Toyota Tacoma Extended Cab
  • Compact Pickup Class 4WD - Chevrolet Colorado Crew Cab 4WD
  • Full-Size Pickup Class 1/2 Ton 2WD - Toyota Tundra Regular Cab 2WD
  • Full-Size Pickup Class 1/2 Ton 4WD - Chevrolet Silverado Extended Cab
  • Full-Size Pickup Class 3/4 Ton 2WD - Chevrolet Silverado Extended Cab
  • Full-Size Pickup Class 3/4 Ton 4WD - Chevrolet Silverado Extended Cab
  • Full-Size Pickup Class One Ton 2WD - Chevrolet Silverado Extended Cab
  • Full-Size Pickup Class One Ton 4WD - Chevrolet Silverado Extended Cab
    Vans:
  • Mini-Van Class under $27,000 - Honda Odyssey
  • Mini-Van Class over $27,000 - Honda Odyssey
  • Full-Size Van Class - Chevrolet Express AWD
Contributor Tom Ripley is an automotive and human behavior specialist who writes from his home in Villeperce, France.

Winter of Discontent, Part II

If you needed any more evidence that the auto industry is a follow-the-leader business, you can find it in the most recent missed opportunity represented by the Chicago Auto Show. For those of you who are unaware, the Chicago show is one of the premier auto shows in the United States and one of the most well attended auto shows in the world. It annually draws an estimated one million visitors during its nine-day run, and, its 840,000 square feet of exhibit space places it among the largest auto shows in America. Through the years it has been the traditional site of major model introductions, including the unveiling of the original Mazda Miata. But this year, sadly, the Chicago show might best be remembered as being the site of missed opportunities for many manufacturers.

For a variety of not-very-good reasons, auto manufacturers from around the world have decided that the North American International Auto Show in Detroit in early January is the place to unveil new concept vehicles and production models. There is some sense in that view since the Detroit show does draw more individual members of the press than does Chicago (and for that matter New York and Los Angeles.)

This year the Los Angeles show had the unenviable luck to occur right after New Year's Day, placing its media preview days between Christmas and January 1, a veritable Death Valley for media coverage, so it is not surprising that car companies made just a smattering of important announcements in LA. Unfortunately, the herd instinct induced one car company after another to make scores of big debuts in Detroit just days later. And while at first glance that seems like a good idea, the fact is that the nation's press can only absorb and report on so many auto-related stories at a time.

That is why interesting concept cars like the Chevrolet Nomad, Ford Bronco, Land Rover Range Stormer, and Nissan Actic didn't get much press play. That is also why important production models like the Ford Five Hundred, Pontiac Solstice, and Dodge Magnum were also largely ignored by the press. Fifteen minutes of fame? Forget it! More like 15 seconds.

And woe to the second- and third-tier (read low-selling) manufacturers! Subaru's newly re-designed Legacy was recently named Car of the Year in Japan, but it caused barely a ripple in Detroit. The Hyundai HCD-8 is a pretty good-looking concept coupe, but it didn't generate much ink, nor did the Mitsubishi Concept-E that featured a hybrid drivetrain. The new Kia Spectra might as well have been introduced on an ice flow in the Arctic Ocean for all the heat it generated, and Suzuki was notable only for its difficult-to-watch press conference that the press most often failed to report on.

What one has to wonder is why a car company will pay $1 million or more to design and build a concept vehicle, throw in another $250K - 500K to do a splashy unveiling to the press only to see their beauty sink from sight before the last vestige of fake smoke has wafted off the stage?

The answer, of course, is the herd instinct. Or should we chalk this up to the lemming instinct, since, just like lemmings, the car companies seem quite willing to follow one another right off the cliff when it comes to spending money on auto show press introductions?

One solution to this rampant waste is the Toddling Town, Chicago. Sure, car companies do some debuts in Detroit. It is the Motor City and the capital of the American car industry. But why not spread the wealth out a bit and use great historic shows like Chicago (and LA and New York) to introduce other new models instead of throwing your money into the cold Detroit air and watching it blow away?

Mazda with its Ibuki, Hyundai with its Tucson, and Buick with its La Crosse did just that this year, and you can bet when the coverage is tabulated, it will confirm that their decisions were excellent strategic moves. And now that Chicago has announced plans to add more than 369,000 square feet in McCormick Place's North Building to its already cavernous exhibit area on the shores of Lake Michigan, the Windy City seems the perfect venue to make a big splash.

Driving Today Managing Editor Jack R. Nerad has been covering major international auto shows for more than two decades.

Winter of Discontent (Part I )

As I walked by the Ford Motor Company exhibit on the third media day at the North American International Auto Show in Detroit it really hit me. There stood J Mays, Ford's director of design, pointing out the virtues of the new Shelby Cobra to a journalist type, while immediately behind Mays was the Ford GT, looking handsome but slightly forlorn, despite the fact Ford hasn't even sold one yet. And beyond that, even more forlorn, was the still handsome but now cancelled Ford Thunderbird, which, if you remember, was the toast of the Detroit show just a few years ago.

To say that this presented more than a slight case of deja vue is understating it. It wasn't that long ago that I had stood on the same stand chatting with J as he extolled the retro wonders of the T-Bird concept that then became a production car and, just a quickly, became an obscure footnote in automotive history, proving yet again that two-seat cars, no matter how pretty, just don't sell. So what is Ford hanging its hat on as icons of its hoped-for resurgence: a couple of two-seat cars that may be interesting enough to the 50-plus crowd that can actually remember the Sixties. However, these cars are more or less meaningless to the bulk of young new-car buyers Ford is supposedly trying to impress before they become tainted with the import bug, never to recover.

Don't get me wrong -- I like the Ford GT and the Shelby Cobra -- but, hey, I'm among the relative few out there who have been blessed with behind-the-wheel experiences of the Ford GT-40, the 60's racecar that inspired the GT, and the original Shelby Cobra that inspired the latest chip off what is getting to be a very, very old block. My feeling is, if you keep playing golden oldies, it's obvious to all that your current tunes obviously aren't hits. Since it is doubtful Ford Motor Company wants to be a "nostalgia" company, maybe looking for the new hits instead of a tendency to recycle the old ones is in order.

Over at beleaguered DaimlerChrysler, they weren't living in the past, except by stealing the 300-C nomenclature for their latest attempt to breathe new life into the Chrysler 300 letter-series tradition, but they did show off yet another in a bewildering series of two-seat sports GTs with astronomical prices and virtually no relationship to anything real people -- even very wealthy real people -- drive day to day. Yes, the Chrysler ME Four-Twelve surprised and stunned the gathered press. After all, even the hard-bitten veteran automotive press can be stunned by a claimed zero to 60 miles per hour time of 2.9 seconds and a "theoretical" top speed of 248 miles per hour. Golly!

And who doesn't like swoopy mid-engined styling wrapped curvaceously around a six-liter V-12 complete with four (count 'em) turbochargers? Hey, what's wrong with 850 horsepower and arriving at 100 mph in less time than it takes most cars to reach 50? But the big question that hung on the lips of veteran car writers was, why now? It is patently apparent that Mercedes-Benz, DaimlerChrysler's owner-sibling ("my sister, my daughter, my sister and my daughter") has the technical competence to build a 248-mph street rocket if it wants to. By why, when the Chrysler and Dodge car brands seem in need of some compelling volume vehicles, is the company fooling around with a vehicle whose planning volume you could count on your thumbs? If DaimlerChrysler decides to build the ME Four-Twelve -- and DaimlerChrysler executives at the show hinted broadly that they would -- you can expect a production run about as long as that of the Lunar Rover.

Since we have our curmudgeon hat on, we might as well take a swing at the world's largest car company, General Motors. While Ford and Chrysler seemed to fight it out for "most esoteric" honors, GM seemed to be vying for the all-things-to-all-people crown. In fact, GM appeared to aim its press conferences not at the media and the public but at the stock market analysts, touting the broad applications of its new Kappa architecture -- the basis of the upcoming Pontiac Solstice (oh, great, another two-seater) and the Chevrolet Nomad and Saturn Curve concept vehicles.

Guess what. Consumers buy cars, they don't buy "platforms" or "architecture," so the fact GM can build several models off the same basic chassis doesn't mean much to the average consumer. And of course, the concept isn't new, either. GM has been doing the same thing since way back in the Thirties.

As to the Kappa platform itself, it seems like a thoroughly competent chassis. And it's nice to know that after taking the past 20 years to wean American drivers off rear-drive vehicles, GM has decided that moving back to rear-drive cars is the wave of the future.

And so it goes. Next year Ford could well introduce a shockingly low-priced "entry-level" model with a small displacement four-cylinder engine and a revolutionary planetary gear-set. And you can get it in any color as long as it's black.

Driving Today Managing Editor Jack R. Nerad has been reporting on major industry auto shows for more than two decades. Ever mindful of our pluralistic society, next week he vents over the import category.

Savvy Car Shoppers Use the Net

Ten years ago futurists predicted that the Internet would completely change the way consumers shop for goods. While that revolution never gained the strength that was predicted, there is no doubt that the Net has altered the way people shop for big ticket goods, and the most obvious example is in the category of automobiles.

While the number of consumers visiting automotive Web sites during the new-vehicle shopping process has grown modestly in the last couple of years, the impact the Internet is having on buying decisions has increased significantly, according to the J.D. Power and Associates 2003 New Autoshopper study just released.

While most consumers still go into retail stores to buy groceries and prescription drugs, the Internet has gained substantial importance with car buyers. The J.D. Power study found that nearly one-half (49 percent) of new-vehicle buyers say the Internet impacted their make/model purchase decision -- up from 40 percent in 2002. Furthermore, 24 percent of buyers say the Internet had a "big impact" on their make/model choice -- up from 16 percent a year ago. The Internet also had a reported effect on the price consumers paid for their new vehicles among 49 percent of buyers -- up from 41 percent in 2002.

"The dynamic surge in the percentage of buyers indicating the Internet had a big impact in their make/model selection and the price paid reflects the increased experience and comfort new-vehicle buyers have with the medium and how much value they see in the information available to them," said Dennis Galbraith, senior director of automotive Web site research at J.D. Power and Associates.

Though many Internet car shoppers say they surf the Net to save time, the average Web user doesn't seem to skimp on the time they spend doing online research. The study said that, on average, automotive Internet users spend a total of five hours online shopping for their new vehicle. It's also clear that Net surfers do a great deal of research early in the process, separating the wheat from the chaff, before they go to new-car dealerships. Some 89 percent said they conduct online research before actually visiting a showroom.

Where do they conduct their research? Most seem to use a combination of car manufacturer and independent sites. The study found that 83 percent of automotive Internet users visit at least one manufacturer Web site during the shopping process, compared to 79 percent who visit an independent site. Unfortunately, many who visit independent sites run by car dealers might not be getting all the information they want. Other J.D. Power and Associates research shows that while 90 percent of auto dealerships report having Web sites, 31 percent of those with a site do not post vehicle inventory, a feature highly desired by consumers.

"As the volume of leads that dealerships receive from the Internet continues to multiply, dealers must understand that the online lead is not merely a pivot point from Internet to showroom," said Galbraith. "Many of today's buyers are savvy shoppers with advanced Internet navigation and communication skills. Dealers who approach online leads with a strategy of withholding information in an effort to lure shoppers into the showroom may prompt shoppers to simply find another dealership willing to provide online price quotes or inventory information."

Perhaps because of this phenomenon, only 20 percent of buyers purchase their new vehicle from a dealer whose Web site they visited. When more detailed information, like vehicle inventory, is posted on dealer Web sites, that figure is expected to rise.

Overall, a substantial majority of American car buyers now use the Internet as part of the car-buying experience. In the past year the percentage of new-vehicle buyers who use the Internet for automotive shopping rose to 64 percent, up from a two-year plateau of 60 percent in 2001 and 2002. Kelley Blue Book, Edmunds and ConsumerReports are among the most visited independent automotive Web sites.

The 2003 New Autoshopper study is based on responses from 30,352 consumers who leased or purchased a new vehicle registered in January or February 2003.

Do You Know Your Car's True Identity?

With electronic funds transfer, online purchasing, and credit cards everywhere, the problem of identity theft is a hot topic for consumers, retailers, and law enforcement. Recently a series of ads running in heavy rotation on TV has pointed out the problem in a blatantly in-your-face way. But now identity theft has a new wrinkle. The stolen identities aren't those of people; they are the identities of cars. In fact, if you are driving a used car these days, that car might not be what you think it is, and the difference could end up costing you thousands of dollars.

The new scam is called "VIN cloning," and it involves using a vehicle identification number (VIN) from one vehicle to mask the true identity of another (stolen) vehicle. In essence using the cloned VIN, which is the vehicle equivalent of a Social Security number, turns that stolen property into a "legal" vehicle that can be sold and titled.

Unfortunately, more and more unsuspecting consumers find themselves as unwitting recipients of stolen goods. Take Shawna Martin, for instance. She always loved Jeeps, so she was thrilled when she purchased what she believed was a used 1984 Jeep Cherokee. But, when she took the vehicle in to be serviced, her mechanic encountered a problem.

"He couldn't imagine why a 1984 Jeep was taking [model year] 1990 parts," said Martin. "I did a CARFAX Report, and the mileage turned out to be vastly different."

Based on the info she obtained from CARFAX, the leading provider of car history data, Martin thought she was the victim of odometer fraud, so she called the state police to report the discrepancy. Instead of confirming the rollback, the police determined her 1984 Jeep was actually a 1990 Jeep that had been reported stolen. Police immediately confiscated the vehicle.

"They had it for nearly a year, which was horrible," she said. "I was making loan payments on a car I didn't even have."

When Martin was finally able to get the vehicle back, it was no longer mechanically sound because it had been sitting in the impound lot for so long. Martin, as well as the dealer who unknowingly sold her the stolen car, was a victim of VIN cloning.

How do thieves steal vehicle identities? It is not as difficult as you might imagine, and the technique dates back to long before the Internet came into play. Often it is as simple as visiting an auto salvage yard.

"You don't have to sneak in. A lot of yards have a 'pick your own parts' policy," said an undercover police informant familiar with the process. "You go back there and take down the VIN numbers."

Car thieves can also obtain "new" VINs by swiping the plate or the number from vehicles sitting at dealerships or in parking lots. They then use the counterfeit numbers to obtain new ownership documents under false pretenses. Or they may simply forge new documents using the stolen vehicle identity.

There are steps used car shoppers can take to avoid "cloned" vehicles. Scott Fredericks, Vice President of CARFAX, recommends that consumers start by checking the VIN on the vehicle's dashboard against the title documents.

"You should also match that number in other places on the vehicle including under the hood and the door jamb on the driver's side," said Fredericks. "Make sure it matches in all three spots."

Consumers also can protect themselves by obtaining a comprehensive vehicle history report for their dealer or at the Carfax Web site. Sadly, statistics just released by the FBI in its Uniform Crime Report indicate that the most recent year examined in detail (2002) was the third consecutive year that the vehicle theft rate increased. The agency's "Crime Clock" reveals that, based on those numbers, a vehicle is stolen every 25.3 seconds in the U.S. To avoid being part of this $8.4 billion problem, be especially careful when you buy a used car. As if you hadn't heard that advice before.

Villeperce, France-based Tom Ripley is an expert on identity theft. He writes frequently for Driving Today.