Why are factory navigation systems still so expensive?
Over the past year, the cost of third-party GPS navigation systems has dropped precipitously, with entry level units now starting at under $150. For that price, you can get a 3.5- to 4-inch touchscreen that comes fully loaded with maps of the entire United States. Additionally, one will likely include tens of thousands of points of interest, like restaurants and gas stations, and give you turn-by-turn voice directions as you drive. Some systems even have the ability to download traffic data that can adjust your route on the fly. One of the nice things about these third-party systems is the ability to take the GPS unit along with you after you park. Even the most expensive of these units costs under $1,000 now.
So the question is this: why does every car that comes with a navigation system as an option cost $2,000 or more? Admittedly, many of them have larger 5- to 6-inch screens and they're integrated into the dash, of course. In the case of cars like some from GM and BMW that have heads up displays, they can even put the directions out in the air in front of the driver. But given that automakers likely get the hardware for a lot less than people can buy it retail, it seems to us that nav systems from the factory are a huge profit windfall opportunity for automakers right now. Personally, the next time one of us shops for a car, we'll take a pass on the optional nav system and buy a $150 Magellan, Tom-Tom or Navigon that we can switch between cars and take on walks.
Reader Comments (Page 1 of 5)
geekmorgan 4:03PM (2/26/2008)
I know right?! I'm sure a Navigation unit would add to resale value, but I'd much rather stick with my easy to update TomTom than buying special dealer-sold DVD updates etc.
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Allan 4:06PM (2/26/2008)
Actually I've heard that many of them have the potential to hurt resale...
Oh ya:
http://gadgets.autoblog.com/2007/05/09/in-dash-nav-systems-do-damage-to-resale-value/
mr 4:36PM (2/26/2008)
They don't hurt resale, they just don't maintain their value as well as the rest of the car.
Sean 9:23PM (2/26/2008)
This is hard to believe but nav systems actually REDUCE resale value, I couldnt find the link but I deffinatly read it does. Now I realize this may be hard to believe but the explaination they gave is navagation units are so rapidly improving in user interface, ease of use and features. Ever use a in dash nav unit thats like 5 years old? (its bad) just this year my parents bought a 328xi bmw with the idrive nav now just a couple months later they annouce edge and a full internet explorer browser built in. Alot of these companies make it difficult to use your own in dash units because of the propietary shape of the unit and or place after-market unit would go not really standard double din
lad 12:13AM (2/27/2008)
If you want a kick and you have "Streets and Trips with GPS" on your laptop," take it with you on your next plane trip. It's great to see the ground speed in excess of 500mph, to observe an altitude of 32,000feet and to point to exactly where you are above the ground.
adam 11:07AM (2/27/2008)
lets not forget a lot of the factory in dash nav systems also tie a lot of the car itself into the user interface. i have a lexus is350 and without the nav my bluetooth phone, engine diagnostic, phonebook, cd and mp3 cd/dvd navigatoin would all be quite annoying on the go with a led output. i'm not saying its worth 2k necessarily, it is a jacked up oem price but imo it really depends on the car and how the navigation is integrated.
some navs are necessities to fill the dash, some like pop ups are actually ugly.
cordite 11:54AM (2/27/2008)
lad, I don't know if you've ever read the airline safety card. While you can use a laptop, iPod, or any number of cd players, PMP or DVD players you can NOT use a GPS receiver. While it may seem harmless to use what appears to be just a radio receiver it is not allowed. Plus if you get caught and refuse to turn it off, you can expect the police to greet you at the gate. Buh Buy.
Allan 4:04PM (2/26/2008)
I would assume that it's partly b/c it's so integrated into the vehicle, as well as usually functioning as the stereo as well. But I really don't know.
Though I definitely agree they're way overpriced. If I weren't to buy a portable GPS or something, I'd at least buy an aftermarket headunit with integrated NAV before I'd buy the factory option.
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RP 12:03AM (2/27/2008)
The dealers also want $100-$150 to upgrade your map DVD -- just to get the latest street data! What a rip off -- when brand new units cost $150-$300.
VP 4:06PM (2/26/2008)
Unless the dealer gives me a nav for no additional cost i see no reason to spring for a factory unit. The only real incentive is that a factory installed GPS is hard to steal. But with my Garmin Streetpilot i can even use it in my beater Maxima.
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Guenther 4:49PM (2/26/2008)
Hard to steal? not really- there appears to be quite the market for these OE units. Dad (and 5 neighbors) all had their VW/Audi navs stolen one night- no damage to the vehicles WHATSOEVER. The insurance had to cough over 3 grand.
Joe K. 5:27PM (2/26/2008)
Couldn't disagree with you more... Factory systems are surprisingly easy to steal. The thieves don't need to know anything more than smash and grab. same as stealing a radio...
Christian Stevens 9:43PM (2/26/2008)
I think he meant hard to steal AS OPPOSED TO a winshield mounted portable one.
bananas 4:06PM (2/26/2008)
The problem is that on many systems, they are integrated into or bundled with the better stereos and systems that many people want. On all of the vehicles I am looking to purchase/lease next, when I build them on the manufacturers websites, it is normal to get that "hey, since you want that heated seat, you need to add the leather and luxury package, oh and we will upgrade your wheels to 18 inchers with summer tires and a sport suspension, all for an additional price of $8,500" pop-up window. What a pain in the ass.
If I want a really great stereo and all of the awesome features of the integrated dash screen, why do I have to buy the nav too for the $2000 more?
It is a HUGE profit area, and sadly there is little choice if you want the better stuff you have to pay for all of it.
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drunkenpublicness 4:08PM (2/26/2008)
Well I know the NAVI option in Mitsubishi products also includes a 30gig hardrive for music storage.
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Spytap 4:18PM (2/26/2008)
Wow, a whole 30 gigs! That has to cost them at least 45 bucks!
almost Dr. G.. 4:36PM (2/26/2008)
LOL spytap! its true.. just 30 gigs? a similar 250 gig internal HD isnt much more expensive. and then they claim is a marvel. i mean my ipod which i have in my pocket could hold 160 gigs.
paul34 6:34PM (2/26/2008)
Meanwhile a 750 GB drive can be had for $150... and that is RETAIL, not even the ridiculously low volume prices that large manufacturers can get.
RP 11:59PM (2/26/2008)
An in-car hard-drive has to withstand much more abuse than the one on your laptop/desktop PC. Car interiors can reach 140 deg F on hot days, and there's constant vibration while in use.
So I hope that that 30 gig drive is a step above the computer-grade version from Fry's. Might not be.
Anyway, soon it'll all be Flash memory.
AlexP 12:03AM (2/27/2008)
Those are regular hard drives (3.5"), auto manufacturers don't use them, they're using reliable and proven old notebook ones that a road-worthy.
And so far the biggest drive that's "proven" is 80GB, so 30GB in an econobox isn't bad, but personally I'd rather have a USB link to my system à-la SYNC system so I can hook up an hard drive instead.