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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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2007 Kia Rio Review
New Rio SX brings sportiness to benchmark subcompact.
Introduction
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Kia Rio was setting new standards for subcompacts even before last year's complete makeover. Now this roomy little car is better than ever. Rio has received Autobytel's "Editor's Choice for Most Improved New Car," and ranked highest for initial quality in the subcompact segment in the J.D. Power and Associates 2006 Initial Quality Study. Rio has also been recognized as one of the most fuel-efficient vehicles on the market by both the Environmental Protection Agency and by J.D. Power. The '06 Rio that earned all that acclaim was offered as a practical sedan or as a more deluxe and sporty five-door hatchback called Rio5 SX. For '07, Kia has added an SX-trimmed sedan featuring all of the hatchback's sporty equipment: front fog lights, 15-inch alloy wheels, rear spoiler, metal-finish interior trim, metal pedals, black mesh sport fabric seat inserts and door panels, leather-wrapped steering wheel and shift knob, and red stitching and highlights throughout. All '07 Rios come with new shift knobs (manual and automatic), a chrome Kia logo on the steering wheel pad, and an illuminated ignition-switch surround. The SX models' 15-inch alloy wheels have been redesigned, and 16-inch rims are now available. SX models also feature new chrome accents on their instrument panel air vents.
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Rio competes against a wave of new subcompacts that includes the Toyota Yaris, Nissan Versa, Honda Fit, and Chevrolet Aveo, along with Rio's corporate cousin, the Hyundai Accent. All of these cars are smaller than market-dominating compacts like the Toyota Corolla and Honda Civic, but many offer better fuel economy with little loss of interior space. Rio rates as high as 38 mpg on the highway, while delivering agile handling. And Rio comes standard with six airbags, a safety feature normally associated with expensive luxury cars, not subcompacts. Mechanically, there isn't much to distinguish a Rio from a Hyundai Accent. That's no bad thing, as both are state-of-the-art small cars. Rio is a bit more boldly styled than Accent, and the five-door variation is a Rio exclusive. Chassis tuning is a little different as well, with Accent biased toward ride comfort and Rio toward handling. The stigma attached to owning a small car in America is becoming a thing of the past and the latest iteration of the Kia Rio is among the reasons why that's happening. next page |
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Economical Hatchbacks
I drove the brand new 2006 Kia Rio today and it is "Da Bomb!" It is just like the Scion xA, but a little better in all...
10/19/2005 | 13:10 PM | Doohickie
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dead Kia, help me diagnose
I think my 2003 Kia Rio has a dead starter. For the past couple of months the car has been hard to start, but not...
08/30/2006 | 08:08 AM | sybild
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First Drive: 2001 Kia Rio
Need reliable commuter transportation on a bare-bones budget? The two most common choices are: hunt for a late-model used econom
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