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True Cost to Own (TCO) - Hidden Costs of Car Ownership

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  • tidestertidester Posts: 10,059
    Thanks, BR, but do you mean that without meeting those objectives or CSI scores there is no holdback?

    tidester, host
    SUVs and Smart Shopper
  • british_roverbritish_rover Posts: 8,454
    Depends on the Brand it would more likely be reduced not eliminated. Most of the euro brands that don't have holdback in the same way that the domestics and Japaneses brands do but the do have incentive money that is directly tied to CSI, volume and various audits.

    Perform poorly on any one and the financial consequences can be dire.
  • isellhondasisellhondas Issaquah WashingtonPosts: 19,042
    You are so wrong and I am so tired of trying to explain what holdback is and how it works.

    It is NOT bottom line profit!

    People who are obsessed with holdback should also think about the trememdous OVERHEAD that dealers pay every month just to keep the doors open!
  • mikefm58mikefm58 Posts: 2,882
    No need to scold me, I "think" you replied to the wrong msg. Where in my post did I say anything about it being bottom line profit?
  • isellhondasisellhondas Issaquah WashingtonPosts: 19,042
    That wasn't my intension. I guess I get sick of "some" people acting like holdback somehow belongs to them.
  • mikefm58mikefm58 Posts: 2,882
    Yeah I agree, I did some work here in Florida when the hurricanes were bad in 2004 running a tree service business. Some people think charging $50 an hour for labor when a business has 2-3 workers at a time on the job is outrageous.
  • dave8697dave8697 Posts: 1,498
    I was checking the cost to buy a G5. A Pro-Honda person wrote that TCO is high for the G5 in her quest to uplift the Civic as an alternative. Curious, I tallied the depreciation, the maintenance, and the repair costs from TCO for 5 years. For the G5, I plotted the depreciation from the TMV price. Then I subrtacted the maintenance and repair from the depreciation curve. The result for the G5? The net value of the car was ZERO in less than 5.5 years. This takes away any shred of truth for me for that part of the TCO data. I wonder if you would lose a Honda Civic in 5.5 years also, or is this opinion (not data) just strongly biased against American engineers and American led assemblers output?

    How can the G5 have almost $4000 of repairs and maintenance in just the 4th and 5th years of ownership while still under the 5 year, 100000 mile powertrain warranty and the lifetime or 100000 mile rust thru warranty, and just coming off the (dlr makes everything perfect at the end of the)3 yr bumper to bumper warranty?

    So someone paying the sales tax down on a loaded G5 ending up with a 5 year payment of $383 a month must plan on $145 a month additional for repairs and maintenance all thru yrs 4 and 5? Then what? The powertrain warranty ends and the thing starts to really fall apart?

    I budget $150-200 a year in maint and repairs for each of my '96, '98, '98, '99 GM and Ford cars and much less for my '01 Chev. That includes tires and oil. I always spend less.
  • mikefm58mikefm58 Posts: 2,882
    How can the G5 have almost $4000 of repairs and maintenance in just the 4th and 5th years of ownership while still under the 5 year, 100000 mile powertrain warranty and the lifetime or 100000 mile rust thru warranty, and just coming off the (dlr makes everything perfect at the end of the)3 yr bumper to bumper warranty?

    I would really question that item. But I could see tires, brakes, a battery, and maybe one unexpected repair running a grand or more, but that's about it.
  • british_roverbritish_rover Posts: 8,454
    Well the 5 year 100,000 mile warranty is a recent addition maybe the formula has not been modified to account for that yet.
  • dave8697dave8697 Posts: 1,498
    why not? 2007 is the first year of this car and the 100k warranty started with the 2007 models across the entire GM line, starting a full year ago.

    Pontiac hasn't run the first TV commercial for the G5 yet and it already has it's 5th year repair bill average calculated.
  • british_roverbritish_rover Posts: 8,454
    Well the G5 is just the Cobalt with a different badge and the Cobalt, at least drivetrain wise, isn't any different from the last year caviler. As far as I remember from working on cobalts that even though the platform is new the engines from the Caviler were carry over.
  • asafonovasafonov Posts: 396
    I budget $150-200 a year in maint and repairs for each of my '96, '98, '98, '99 GM and Ford cars and much less for my '01 Chev. That includes tires and oil. I always spend less.

    You may be right in your critique of the TCO on the G5, but if you spent less than $150-200 a year on cars that are from 5 to 12 years old, you have been very lucky. $150 covers what, 4 oil changes and a couple of rotations, and nothing else (trans drain, radiator flush, new wipers, new tires, new battery) - and nothing that ever breaks.
  • dave8697dave8697 Posts: 1,498
    G5 Engines are not carryover from Cavalier. The drivetrain is not the same as the last year Cavalier. The car weighs 360 lbs more and has 8 more HP from the base engine. The displacement is still 2.2 L but the engine was redesigned. The 173 HP supercharged optional engine was not available on the 2005 Cavalier either.
    Still, with no customers having had to repair a Cobalt yet, the G5 repair is based on non existing data. All cobalts are still under the 3 year bumper to bumper warranty.
  • dave8697dave8697 Posts: 1,498
    Spreading 50k mi / yr across 6 vehicles, some get driven 22k and some 4k, with the avg. of 5 lesser driven ones being about 6k/yr. The 22k/yr car is running a tiny bit over $222 a year due to 60 series tires it needs. Some of the others have needed nothing but oil changes in 2 years. Tire rotations are free and Oil changes are done by me. My original, 20 yr old trans fluid in my '87 Astro is still doing fine so why mess with it? I wouldn't expect myself to be taking a 40k mile, 3-4 yr old G5 to the Dealer and say "Here's $1375, give this thing a checkup even though it runs perfect" And then say "Here's another $900, fix something covered under warranty but charge me anyway". That is what Edmunds TCO shows for G5.
  • asafonovasafonov Posts: 396
    As I wrote, I have no issue with your analysis of the (faulty) TCO estimate on the G5. That said, your vehicular situation (several older vehicles with mileage spread between them, DIY oil changes) is not very common.

    My original, 20 yr old trans fluid in my '87 Astro is still doing fine so why mess with it?

    Good point. Transmission oil does not degrade as the coolant does, but I still do drains - not power flushes! - to renew it as per manufacturer manual.
  • dave8697dave8697 Posts: 1,498
    I compared the Edmunds TCO data for both cars.
    Fallacy no 1: The Honda is $2200 more to buy and is worth $2500 more after 5 years yet costs $348 less over the 5 years to insure. How could the insurance companies not charge as much per insured dollar of car value, making the Honda higher cost to insure?
    Fallacy no 2: dividing fuel cost by today's local $2.93 price and dividing 75k mi by the gallons, the avg TCO assumed mileage is 33 mpg for an automatic Civic Coupe and 28 for an automatic G5 Coupe. This 5 mpg difference accounts for 60% of the 5 year TCO difference advantage of the Honda. I currently get 28 mpg average in my '96 Riviera that outweighs G5 by 600 lbs, has 161k miles on it and 225-16-60 tires and a 20 gallon tank. G5 can't beat the Riv with a 4 cyl, narrow tires, and a 13 gal tank? Yet Honda can use a 220 lb lower weight and 400 cc smaller engine advantage over G5 to get 5 mpg more average?
    Fallacy no 3: A 3 year old Civic Coupe with 15k mi left on the powertrain warranty and nothing left on the B to B warranty is resellable for $10,822 while a ONE year old G5 with 85k left on the powertrain warranty and only 15k total mi on it is only resellable for $85 more than the 3 year old Civic? What do you get, a k mi of warranty for each dollar more with the G5? So 'I can have one sixth of the warranty for an $85 savings buying the 3 year old Civic' has people jumping? This fallacy accounts for over 50% of the TCO advantage of the Civic.
    Fallacy no 4: In year 5, when only the G5 is still under warranty, the G5 maint and repair expenses are $29 per month more than those of the Civic, which is out of warranty and needs a new rubber timing belt (and water pump while your in there), typically to the tune of $7-800?

    Summary: Unlike Civic, G5 has a usable back seat and so much more equipment for the price. $15920 will get you ABS, Traction Control, auto trans, 148 HP, 152 ft-lbs T, power surfoof, 7 spkr Pioneer cd, power mirrors, power locks, remote keyless, power windows, DIC with ext. temp, A/C, radio on steer wheel controls, 16" rims, cruise control, tilt, cargo net, and a few more things. Most of this list is not found on a $15920 Civic. The 2991 curb weight is closer to the '04 Accord and not the '04 Sunfire, so don't pass it off as a Sunfire rebadge with all the early '90's baggage that implies for reliability.
  • british_roverbritish_rover Posts: 8,454
    The Civic is a a very desirable used car with a proven track record of reliability and performance.

    The G5 has no track record as it is a "New" Model for Pontiac. Pontiac also has all of the typical GM baggage to overcome. Honda does not have any of those problems.

    I liked my old Pontiac and it was a good car but there is a huge perception problem that all the GM brands have to over come. That perception problem was completely justified for all the junk cars they made over the years. They are better now but I don't think they are necessarily equal to Honda in every way.

    Also as for your first fallacy insurance companies use a lot more then dollar value to figure out their rates. The programs they use to figure out insurance rates take in hundreds of different variables.
  • bobstbobst Posts: 1,783
    Those are good points, Rover.

    In the 1980's, Honda was producing very good cars but people bought GM cars because they were loyal to that manufacturer.

    Now GM and Ford may be making great cars, but many of us have developed loyalty to the Japanese cars and that is what we intend to keep buying. The American manufacturers have lost a whole generation of car buyers.
  • blueiedgodblueiedgod Posts: 2,798
    Fallacy no 4: In year 5, when only the G5 is still under warranty, the G5 maint and repair expenses are $29 per month more than those of the Civic, which is out of warranty and needs a new rubber timing belt (and water pump while your in there), typically to the tune of $7-800?

    So would Fallacy over original Fallacy 4 be Fallacy 4² ?

    Civic has not had the timing belt since the 2002 Civic Si. It has a timing chain.
  • In response to your message, if that is the case, the buyer can add or subtract the actual figure paid by most new car buyers from the TCO calculated price.
  • wisemoneywisemoney Posts: 42
    The best car to buy in order to keep TCO down is a Honda Fit.
  • msacksmsacks Posts: 5
    I think that these $299 /mo lease ads you see are a scam.
    It can't cost less than $600/mo realistically for an A4.
  • msacksmsacks Posts: 5
    I agree with you here. I was considering purchasing this care just so I didn't have to carry a car-note. But there is something to be said for a little bit of luxury.

    The fit is the modern Honda CRX. There is something to be said for the pleasure of driving.
  • kyfdxkyfdx Posts: 45,974
    Most of the $299/mo. advertised deals require a substantial upfront payment... amortized over the length of the lease, most of those deals average out to $450/mo.+ tax.. for a relatively low mileage allowance..

    So, maybe not $600/mo., but much closer to $500, in reality, than $299

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  • TCO needs to also take things into account like what tires come on the vehicle. If you live in the snowbelt for example and you buy a new Civic Si, you'll need to purchase a good set of snow tires for $400-$500. On my last car, it cost me $100 per year to swap out all seasons vs. snows twice a year. So, over the course of 5 years that is ~$1,000 in additional costs.

    Also, you could factor in things like gas tank size since a small gas tank makes you fill up more frequently. Might seem nit-picky but we just took a trip to Reno where gas prices varied by nearly one dollar in a span of 100 miles. We saved $15-$20 one one tank because we were able to choose where we filled up since we had a large tank.

    Overall I do think that TCO is very useful even if it just points out some hidden costs that one might not think about everyday. For example, my Subaru required nearly $1,500 worth of scheduled tune-ups before 100k, while my new Toyota requires $0 worth of scheduled tune-ups before 100k (tune-ups, not oil changes). That is quite a difference, and now I will always take these factors into account when purchasing.
  • geoffm3geoffm3 Posts: 1
    On Edmunds' TCO page, it lists the Pontiac Vibe in the over $40k wagon segment. Now, I know GM sometimes has a reputation for lacking quality, but I think this is a mistake. How can a sub $20k car fit in there? :)
  • Kirstie_HKirstie_H Posts: 10,989
    Hm... that does seem off. You can bring it to the attention of the TCO team by using the "help" link at the top of this page (itty bitty, on the right) since they don't read these discussions.

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  • hi, all,

    i live in colorado and bought a 2007 used car from a small dealership six months ago. the vehicle was sold to me 'as it is'.

    a few days ago i ran into an accident and have had the car worked in body shop. the shop told me that the car was in heavy accident (tell from the condition of interior parts) before i bought it, which i was not informed of by the dealer. I thought i could not argue about it cuz i bought 'as it is'. then i was told that some of the parts were not fixed properly after last accident and might impose some safety issue; and the dealership was not supposed to sell this vehicle to me, or at least should have informed me of that condition.

    if the message i received is correct, i might considering to get back to the dealer.

    i wonder if anyone has experience of such issue...shed some light on it?
    i m totally dummy with the legal system..

    appreciate in advance.
  • dtownfbdtownfb Posts: 2,917
    If you bought it "as is", not sure if you have a case against the dealer. I guess you can try to contact the dealer but not unless he deliberately misled you or lied to you about the condition of the car, I don't see you getting very far. Also remember that the dealer may not have been aware of the prior accident.

    Before you contact the dealer, you may want to pull a Carfax report to see if the accident shows up.

    Good luck.
  • oregonboyoregonboy Posts: 1,653
    I seem to recall something about implied contracts and "fitness for intended purpose". I would think that if the vehicle was unsafe to drive, the buyer would have legal recourse unless it was sold "as is for parts".

    You might try to work something out with the seller. If they give no satisfaction, small claims court or the District Attorney's Office would seem a likely next step.

    Remember, this legal advice is worth exactly what you paid for it. ;)
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True Cost to Own (TCO) - Hidden Costs of Car Ownership - Page 5 — Car Forums at Edmunds.com