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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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2008 Volkswagen Touareg Review
Substantially revised and dubbed Touareg 2.
Introduction
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The Volkswagen Touareg (TOO-r-egg) is a luxury sport-utility with a rare blend of highway composure, refinement and off-highway capability. For 2008, the Touareg gets new front and rear lamps and appendages, and while the wrapper looks familiar, there are a couple of thousand new parts within. This represents a major upgrade for 2008, and it's officially dubbed the 2008 Volkswagen Touareg 2. Like the Infiniti FX and Mercedes-Benz ML, Touareg eschews a third row of seats for generous five-passenger space in compact packaging. Touareg 2 offers a choice of V6 or V8 gas engines and a diesel, as with the Mercedes ML and Jeep Grand Cherokee. Volkswagen's diesel is the the fastest, the most fuel efficient, and the most expensive. All Touareg models use a six-speed automatic transmission and full-time four-wheel drive. Protected by a rigid structure and full suite of airbags and electronic safety systems, the Touareg cabin is at once inviting, involving, and efficient. There are more thoughtful touches than you'll notice at first glance, yet the learning curve is quick, the controls not daunting, and comfort remains high even after hours on the road, or off it.
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Touareg 2 is a genuinely capable four-wheel-drive, and it takes to trails like Letterman to a politco's faux pas. Its combination of clearance angles, gearing, fording depth and suspension travel compares to the Jeep Grand Cherokee, Land Rover LR3, Hummer H2, and Lexus GX470, and none of those offer the massive thrust of Touareg's diesel and the Jeep and Hummer don't have its adjustable air suspension. Back on the highway the Touareg has a Teutonic feel, with smoothness imparted by precision and not softness. It cruises effortlessly regardless of road condition, and belies its heft on winding roads. A sports car it isn't, but you could make a dynamic argument for an inclement weather Grand Touring vehicle. If you like the Volkswagen Touareg 2 but need a third row of seats at the expanse of some off-road capability, check out the Audi Q7; it uses a stretched version of the same structure. next page |
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