Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Midsize Sedans Comparison Thread
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1) any car that sells at a high discount/rebatas/finance-lease buydown, must invariably have a problem with resale value
2) conversely any car that sells at a higher relative price must also hold a higher relative price at trade in time.
3) time is a best friend, for those that do buy those discounted cars simply because the 'residual' value difference will shrink.
4) cost of ownership estimates over a 5 year period are available from 'Intellichoice'. Using the most popular trims (4 cyl., one level above base trim, auto trans.) the 'cheapest' 2006 car to own, the Accord LX, followed by the Camry LE - the 'worst', the Fusion SEL, and most expensive by far, the Mazda6. In this particular group the most expensive cars to buy also end up being the cheapest to own - a fact not lost on the dealers who sell them.
So while it may make you feel good getting a 'great' deal on that Ford/Mazda/Chevy, the fact does remain that you are likely better off paying that extra few grand on that Camcord. And the Hyundai Sonata GLS? - Middle of the pack, despite the long warranty and lower initial cost.
So according to this the dealer is grossing $1350 over invoice on the Accord, but $3700 over invoice on the Mazda6. Therefore, their starting point has overstated the selling price of the Mazda6 by $2350 relative to the Accord.
And to give you an example... I bought a Mazda 6 in 2003 for 16500(sticker price was 22700)and drove it for 60000 miles. Trade it in at the beginning of 2006 and got 11400(depreciated 5100 in 60000 miles). In 2005 I bought an Accord LX and due to the poor quality that Honda vehicles exhibit this days I trade it in after 4 months and 5500 miles and lost 3800. So not only that the Accord didn't come even close to the driving experience that Mazda offered but the loss at the resale was a lot bigger considering the mileage and time frame.
From my experience Mazda 6 beat the Accord in absolutely every possible aspect. So quit telling people about cost of ownership estimates... because they don't match the REALITY.
Edmunds "true cost to own" for Accord LX SE shows $11,111 depreciation for 5 years, which is 55% of the initial transaction price that edmunds gives.
The Mazda6 sport model $11,545, which is 56% of the transaction price that edmunds gives.
For Fusion SE depreciation is $11,819 and 63%.
Sonata GLS $12,240 and 62%.
Your particular Accord may have had poor quality but in general Hondas continue to do very well in quality surveys.
for example, i have never liked toyota seats, and that is something that is high on my priority list. i mean seats that are comfortable for me.
i don't want to dread getting in the seat every time i open the driver's door. imo.
ie - you pay $16,000 for an Accord VP - nothing on it but a CD and A/C - bare bomes model. In ten years, it's worth - oh who cares - it's done it's job and is essentially a downpayment on the next car by then.
The biggest thing, though, is insurance. On a Honda Fit, 1700? They have to be quoting some 20 year old with a bad record because full coverage for my sister's 2006 Civic isn't half that.
The other factors are also inflated, and maintainence is 0 as long as the warranty exists. How they get $1000+ for some cars while under warranty, I don't know. It's just off in so many ways.
Did you mean repairs are 0 for as long as the (bumper-to-bumper) warranty exists? No cars in this class come with manufacturer-provided free maintenance. Some luxury makes such as BMW provide free maintenance, however.
We really couldn't decide what to go with next (money is not at all an issue). I suggested we try the Sonata--I had to drag her kicking and screaming, but after two test drives (of some 25-30 miles each) we both decided to go with the GLS. Now after one year and some 19,000 miles, we think we'll get another Sonata when the time comes, making this the only time we've bought the same car two times consecutively. (We'll be trading in the Outback). Overall mileage for the Sonata has been 29.9 mpg, absolutely no warranty issues, also no squeaks, rattles, etc. Oddly enough, we both agree the seating position and seats may be among the best of any car we've ever had--and that engine is really fun! Vehicle is very well put together, paint job, fit/finish outstanding. Again, as good as any we've had and better than most. Again, money was not an issue, but given the extremely high level of standard eqpt (stability, ABS, 6 airbags, etc.) it is probably the best value we've ever gotten in a car.
Cars are clearly individual buying experiences--and this is our experience only. Anyone considering a new car, I repeat, don't pay a lot of attention to opinions on this or any other board (including mine!)--because they are just that, opinions.
For myself, I am one who keeps a car forever, so depreciation means little to me.
For maintenance and repair costs, typically the sum of those does not seem to vary much anyway. However, I do find it useful to verify that is the case as a few cars do have much higher costs.
For interest and insurance, I would use my own figures. Interest will be the same (assuming the same price for the car), unless manufacturer is offering discounted financing. For myself, insurance cost will be about the same for any car.
Well said. I think some people are more concerned about what others think about a car than what they themselves think about it, and about how it meets their needs and preferences. I've read in Town Hall about people who have purchased a car without even test-driving it! Hard to fathom.
It amazes me that people use only the self-serving advertisements by the manufacturers themselves to make a buying decision.
How long is forever? What you will be able to sell the car for is still relevant even after 12 years.
I bought my 92 Accord Nov. 2 1991. Paid $20,000 (tt&l included). I had the car for 12 years and 140k miles. When I sold the car in 03, I got $5,000 for it (about $1500 over KBB). That is a cost of $1,250/year. I'm sure some other car (with lower initial price) may have been less per year, but would I have wanted to keep the car for 12 years? Not likely. I think insurance and maintenance cost would be about the same for any of these cars, and better fuel mileage was just icing on the cake. I think $1250 per year for a great car like my 92 EX Accord was a good deal, and I doubt I could have done better.
Bought down finance rates and rebates, incidentally, most of the time the same thing. It is usually an either/or proposition. Something like: $3000.00 rebate or 'free' financing for 3 years etc. And if you work it out on paper, your monthly out-of-pocket is very close either way, the folks doing these things are not stupid - there are no free lunches - only some mfgrs. that have trouble selling their cars while others don't. The point of this thread, however, it is a sure thing that whatever you can save up front on a purchase price will usually cost at least that much at trade-in time - unless you are one of those few that keep cars a long, long time.
Others have just as much joy with their choices of their favorite model. The websites with cost of ownership often don't include the extra that's paid in the form of documentation fees to dealers and other things they can think of to add onto the agreed price to hike the total paid. They do this most aggressively at the popular car stores. Those are the ones where people blindly go in to buy because their fellow workers have told them they have the most wonderful car and the only car you should own.
The cost of repairs after the warranty runs out differs from dealer to dealer and brand to brand. So the cost during that 12 years or 15 years may vary based on the original choice.
I ventured into the Sonata showroom recently and tested one for fit. Seemed nice. Not quite a Buick seat but then neither are other mid-sized cars I tested before. Those are the ones where the salesmen acted like they were doing you a favor to let you look at their brand of car. The sonata salesman would have sent me out in whatever level I wanted to test drive. They were not pushy; they were pleasant and sincere. A nice change from the Honda and Toystores in this area.
2014 Malibu 2LT, 2015 Cruze 2LT,
Enter Hyundai with a checkered past and a much improved product and they don't care (at this point) if they make any money, they want market share. Putting as many American fannies as possible in that Sonata, whether at the rental car lot, or through discounts at that dealer that has the same motivations. Of course that dealer is nice but so are the cars relative to their cost. Honda and Toyota, in particular, it is certainly more like - 'we are the best and let me do you a favor and sell you this car' and they are both making more money than know what to do with.
There are occassional exceptions. When my wife bought her Jetta there was 2.9% financing and no offer of a cash alternative. Another exception was Ford offering 0% for 72 months on the Fusion last summer. The cash alternative was, I believe, $1000...I think that was a case where the financing was clearly worth more (assuming you would be keeping the car long enough).
Yes, depreciation means little, but not quite nothing to me.
Coincidentally, it was 12 years for both new cars where "how long" has been determined
Sounds like you did great with that Accord.
I have been traveling lately using rentals. Among the rental cars (non-luxury, non-SUV) most common ones are: Chevy Cobalt, Ford Focus, Pontiac G6, Ford Fusion, Chevy Impala, Buick LeSabre, Ford Taurus. Guess what - all these rental cars will enter the used car market, depressing the resale value significantly. So, if you buy a new Chevy/ Ford and trade it in within first 3 years, you will face a huge depreciation - it's unlikely that the rebates and/ or low APRs are big enough to make that up. The benefits of low APR or big cash rebates are more pronounced if you own the cars for a longer period of time.
Your logic escapes me.
2014 Malibu 2LT, 2015 Cruze 2LT,
Referring to the Camries on the rental lots, I saw a figure linked on this thread earlier in the year that showed the Camry fleet sales to be around 14% (that was for the 2005-2006 models), with the Accord around 2%. There are Accords in fleets, but MUCH fewer than Camries. The domestics are still the rental-lot favorites, with the Hyundai starting to surge here in Birmingham.
The local GM dealer last week had a 2006 Grand Prix - base model with 12K on it. Asking $14K - was willing to haggle down to $12K. 2/24K still on the original warranty.
Keep that car for ten years and the cost is negligible per year.
As others have said, gas is moot - what you going to do, NOT drive at all? I figure 25mpg is average these days, so it should be factored in that way.
ie - 25mpg is average. Better MPG saves you money. A big F250, well... going to cost you money out of your pocket that you feel more. Find an average - and add/subtract based upon that.
Depreciation is moot. It should be a fixed resale value figure that you can resell it for. For some brands, like a Mini, it would show that you can sell a 2 year old model for only a couple of thousand less than you bought it, making the cost to own very small. For Ford and a GM, it would plainly show that you need to keep them forever/trading them in is a disaster.(not that driving them/keeping them for a long time is bad, though)
ie -remove it fom the calculations and put another line under the whole thing titled "return if sold" - and have a second tally under it - directly subtracting the resale price from the TCO for the year.(starting with year 2 of course)
Insurance shouldn't be factored in. Insurance is legally mandatory for all drivers, and if you own ANY car at all, the rates won't vary very much - unless it's an exotic. Insurance for me is a sunk cost just like medical coverage. Not optional, about the same for most vehicles that I have ever driven.
Perhaps they should assume a flat rate of say, $1000 a year, and factor in the insurance companie's multipliers for ONLY the vehicle type. Like MPG would be - save money for certain models and cost more for sportscars and the like.
Lastly, interest is moot. Too many varaibles. Remove it entirely. How much you pay to own the car - you could have payed cash or have bad credit or used your home equity line of credit or received 0% financing or... Now, a typical monthly payment would be more realistic. After 5 years... gosh monthly payment mysteriously went to 0.
TCO for most people is simple - monthly payment plus repairs plus fuel(price fluctuations aside). The rest is either non-negotiable or a cost of doing business/driving.
For most peolpe, that's about 300(paid off) to 600 a month. Factored this way, it's much easier to tell which car is going to cost you more.
P.S. GM needs to move all of its major fleet rentals to Pontiac and not sell base models from their other lines to any of the major firms. If you never ever saw a Buick in a rental lot, it would help resale value greatly.(and you never should, just like you never see a Cadillac at Enterprise(barring special ordered "bling" models in some markets).
Not anymore (for Ford at least). The ALG estimate residual value for a Fusion is in between the Camry and Accord (only separated by a few %). This is because they're not overproducing the Fusion nor are they dumping them into rental fleets or having to put large incentives on them.
Ford has already stated that they're giving up on rental fleet sales in favor of lower volume and higher profitability. The end result will be higher resale values and less incentives at the expense of market share but with a much higher profit.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
Maybe the Accords aren't very popular as rentals due to the harsh ride and the Camrys are more popular for rentals and that explains the lack of Accords.
I see more foreign brands at the satellite rental than I do American brands.
2014 Malibu 2LT, 2015 Cruze 2LT,
Ok, let's try this again.
Lease residuals estimate how much the vehicle will be worth after X months. And it's usually a wholesale price because the lender has to take the car back at the end of the lease and sell it which is usually done at auction (wholesale).
Actual private party or retail dealer sales price will be higher than wholesale value. But percentage wise it will be the same.
If a Fusion has a 49% residual and Camry has a 48% residual and assuming the initial cost of both vehicles is the same, the Fusion is PREDICTED to have a higher resale value (wholesale, retail, trade-in) than the Camry.
Residual values are the predicted wholesale values of a car based on past performance and other factors.
Of course, the problem here is that the Fusion has no true history to go on, so ALG is only making a guess in this case.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
You gotta be kiddin me. Harsh ride? What do you drive? A mattress on wheels? Nice try with the Hondahate.
I thought that's called Buick...
As I said, if I'm going to rent a car between the two midsized choices it would be the Camry just for the nicer ride.
2014 Malibu 2LT, 2015 Cruze 2LT,
Actually, it's more because Honda has made it a point for years to NOT sell their vehicles to fleets.
Many people would like to have an Accord as a rental car, but sadly (for them), don't have that choice. I would have paid a little more to rent an Accord instead of the Impala I was stuck with for 2 weeks.
From the edmunds' comparison:
Db idle: (1) Sonata 40.0 (2) Fusion 45.0 (3-tie) Accord 46.5 (3-tie) Camry 46.5
Db full throttle: (1) Camry 73.9 (2) Sonata 74.3 (3) Accord 74.7 (4) Fusion 77.1
Db 70mph cruise: (1) Sonata 69.0 (2-tie) Accord 70.0 (2-tie) Camry (2-tie) Fusion 70.0
I too see many, many Camry's on a Hertz lot I pass everyday on my way to work, along a freeway. I have also seen Accords/Civic/CRV/Odessey in rental fleets. Maybe not as many, but they are there.