Cars. Trucks. Crossovers. SUVs. Minivans. Add together all the different models from all the different manufacturers who sell vehicles in the United States and you'll end up with hundreds of choices. How is a consumer to choose, especially when there is such differentiation within a single model line? For example, you can purchase a 2011 Ford Fusion for as little as $19,720 to more than $32,000. Making a smart choice can be tough.
Rebecca Lindland, an analyst from the firm IHS Automotive notes, "Consumers have so much to consider. If they're focusing on one particular model, they first need to decide what's important to them regarding comfort and performance," said Lindland. "Fuel economy is also playing a major role in purchase decisions, as is safety."
Lindland went on to explain another trend in vehicles referred to as "the democratization of luxury." Vehicles like the affordable 2011 Kia Optima offer comfort and convenience features once only available on expensive luxury cars such as heated steering wheels and high-end electronics. Additionally, Lindland noted that many nameplates offer high-mileage engine and transmission options as well as all-wheel-drive models. "Performance is not just about acceleration but also about safety," said Lindland.
While the above considerations -- and how they impact the price of the vehicle -- are obvious to most buyers, AOL Autos wondered whether there were other aspects that shoppers should consider when making a choice.
To help us understand the finer aspects of making a good purchase decision, we turned to the experts at Kelly Blue Book (KBB) for advice. AOL Autos presented them with three vehicles choices and asked them which specific model they'd recommend.
- Ford Fusion
- BMW 1-Series
- Infiniti G-Series Sedan
James Bell, Executive Market Analyst for KBB said, "It is difficult to generalize about the buying decision. As diverse as the auto market is in the U.S., there are numerous exceptions to any rule of thumb."
Before diving into details, Bell made this general observation, "Usually, equipment added to a base vehicle will not hold its value as well as the vehicle itself." Options tend to depreciate faster than the base vehicle. "Ultimately, it comes down to value. If a manufacturer offers $3,000 of equipment and only charges $1000 for it, that more heavily-optioned vehicle will probably hold its value well," said Bell.
Ford Fusion
Looking at specific trims, this is how KBB responded regarding the 2011 Ford Fusion: "We would choose the SEL trim level. Compared with the SE trim level, it comes standard with leather, an automatic transmission and Sync." There are seven different Fusion trim levels.
KBB made its pick based on the fact that nearly 100-percent of mid-size sedans are purchased with an automatic transmission, accounting for more than $800 of the increased price between an SE ($21,515) and the SEL ($24,945). Leather seats tend to have a strong residual value, as does Ford's Sync system ($395), an interface that allows for voice control of cell phones and MP3 devices.
"We believe these benefits warrant the price premium of the SEL, while still maintain the car's affordability," concluded Bell. Looking at data for 2006 models, KBB data shows that the SEL retained more value over time than the less expensive S model.
"If money were not an option, we would be proud to own a Ford Fusion Sport with the 3.5L V6 engine and all-wheel-drive. With the Moon & Tune package and All-Wheel-Drive, the Fusion Sport books out at $30,885. This amounts to a very premium car at a good price with sport tuned suspension and all wheel drive," opined Kelly Blue Book's Bell.
BMW 1-Series
Compared to the Ford Fusion, where a more expensive model is a better long-term value, the BMW 1-Series coupe presents a different situation.
If you were considering a 2011 BMW 1-Series, which would you choose? To divine an answer, Bell looked to the historical resale value of the 2008 model, the 1-Series' first year on sale in the US.
The 2008 BMW 128i and 135i had a variance in base MSRP of $4,600. However, a year after they enter the used market, the variance dropped to $2,900. Because the used 128i is less expensive, it sells better and this drives the price of the 135i closer to the less expensive model.
"In cases like the BMW 1-Series, the higher end model usually is the one that takes the depreciation hit because used-car buyers are not willing to pony up the extra cash for the extra horsepower that is the major draw for the more expensive model," said Bell.
Bell also warned that technology or luxury option packages usually aren't good values. "Buyers will get a bump for useful options such as navigation systems, back up camera, park assist, premium sound system, but little return for other included items in such packages like electric sun shades, illuminating entry sills, special leather, heated and cooled seats, refrigerated center consoles, etc.," said Bell.
Infiniti G-Sedan
For 2011, Infiniti expanded its G-Sedan line by adding the less powerful and less expensive G25 to the existing plethora of G37 models.
To understand how the new, entry-level G25 might perform regarding value, the KBB team looked at values for 2006 BMW 328 vs. 335 editions, and 2006 Lexus IS250 vs. IS350 models.
Unlike the BMW 1-Series example, KBB data would suggest that there is enough content difference between the G25 and G37 sedan that the used car market will view the vehicles as appealing to different segments. "We believe these vehicles will both perform similarly in terms of retained value," said Bell. "The high performance G37 will be favored by those seeking a thrilling driving experience whereas those that opt for the G25 are purchasing based on the aesthetics, luxury and value offered by the G."
Luxury vehicles tend to depreciate at similar rates reinforcing the notion that consumers who purchase either G-Sedan can expect their Infiniti to maintain a comparable value.
The Choice Isn't Easy
Three different vehicles ... three difference value scenarios. Deciding what vehicle you choose is emotional and thoughful process.
When you're shopping, making a smart decision requires being practical. AOL Autos recommends seeking out and comparing residual values for the exact models that you're interested in. That data, along with all of the other factors you'd normally consider, will help guide you to a choice you'll be happy driving for years.
Rebecca Lindland, an analyst from the firm IHS Automotive notes, "Consumers have so much to consider. If they're focusing on one particular model, they first need to decide what's important to them regarding comfort and performance," said Lindland. "Fuel economy is also playing a major role in purchase decisions, as is safety."
Lindland went on to explain another trend in vehicles referred to as "the democratization of luxury." Vehicles like the affordable 2011 Kia Optima offer comfort and convenience features once only available on expensive luxury cars such as heated steering wheels and high-end electronics. Additionally, Lindland noted that many nameplates offer high-mileage engine and transmission options as well as all-wheel-drive models. "Performance is not just about acceleration but also about safety," said Lindland.
While the above considerations -- and how they impact the price of the vehicle -- are obvious to most buyers, AOL Autos wondered whether there were other aspects that shoppers should consider when making a choice.
To help us understand the finer aspects of making a good purchase decision, we turned to the experts at Kelly Blue Book (KBB) for advice. AOL Autos presented them with three vehicles choices and asked them which specific model they'd recommend.
- Ford Fusion
- BMW 1-Series
- Infiniti G-Series Sedan
James Bell, Executive Market Analyst for KBB said, "It is difficult to generalize about the buying decision. As diverse as the auto market is in the U.S., there are numerous exceptions to any rule of thumb."
Before diving into details, Bell made this general observation, "Usually, equipment added to a base vehicle will not hold its value as well as the vehicle itself." Options tend to depreciate faster than the base vehicle. "Ultimately, it comes down to value. If a manufacturer offers $3,000 of equipment and only charges $1000 for it, that more heavily-optioned vehicle will probably hold its value well," said Bell.
Ford Fusion
Looking at specific trims, this is how KBB responded regarding the 2011 Ford Fusion: "We would choose the SEL trim level. Compared with the SE trim level, it comes standard with leather, an automatic transmission and Sync." There are seven different Fusion trim levels.
KBB made its pick based on the fact that nearly 100-percent of mid-size sedans are purchased with an automatic transmission, accounting for more than $800 of the increased price between an SE ($21,515) and the SEL ($24,945). Leather seats tend to have a strong residual value, as does Ford's Sync system ($395), an interface that allows for voice control of cell phones and MP3 devices.
"We believe these benefits warrant the price premium of the SEL, while still maintain the car's affordability," concluded Bell. Looking at data for 2006 models, KBB data shows that the SEL retained more value over time than the less expensive S model.
"If money were not an option, we would be proud to own a Ford Fusion Sport with the 3.5L V6 engine and all-wheel-drive. With the Moon & Tune package and All-Wheel-Drive, the Fusion Sport books out at $30,885. This amounts to a very premium car at a good price with sport tuned suspension and all wheel drive," opined Kelly Blue Book's Bell.
BMW 1-Series
Compared to the Ford Fusion, where a more expensive model is a better long-term value, the BMW 1-Series coupe presents a different situation.
If you were considering a 2011 BMW 1-Series, which would you choose? To divine an answer, Bell looked to the historical resale value of the 2008 model, the 1-Series' first year on sale in the US.
The 2008 BMW 128i and 135i had a variance in base MSRP of $4,600. However, a year after they enter the used market, the variance dropped to $2,900. Because the used 128i is less expensive, it sells better and this drives the price of the 135i closer to the less expensive model.
"In cases like the BMW 1-Series, the higher end model usually is the one that takes the depreciation hit because used-car buyers are not willing to pony up the extra cash for the extra horsepower that is the major draw for the more expensive model," said Bell.
Bell also warned that technology or luxury option packages usually aren't good values. "Buyers will get a bump for useful options such as navigation systems, back up camera, park assist, premium sound system, but little return for other included items in such packages like electric sun shades, illuminating entry sills, special leather, heated and cooled seats, refrigerated center consoles, etc.," said Bell.
Infiniti G-Sedan
For 2011, Infiniti expanded its G-Sedan line by adding the less powerful and less expensive G25 to the existing plethora of G37 models.
To understand how the new, entry-level G25 might perform regarding value, the KBB team looked at values for 2006 BMW 328 vs. 335 editions, and 2006 Lexus IS250 vs. IS350 models.
Unlike the BMW 1-Series example, KBB data would suggest that there is enough content difference between the G25 and G37 sedan that the used car market will view the vehicles as appealing to different segments. "We believe these vehicles will both perform similarly in terms of retained value," said Bell. "The high performance G37 will be favored by those seeking a thrilling driving experience whereas those that opt for the G25 are purchasing based on the aesthetics, luxury and value offered by the G."
Luxury vehicles tend to depreciate at similar rates reinforcing the notion that consumers who purchase either G-Sedan can expect their Infiniti to maintain a comparable value.
The Choice Isn't Easy
Three different vehicles ... three difference value scenarios. Deciding what vehicle you choose is emotional and thoughful process.
When you're shopping, making a smart decision requires being practical. AOL Autos recommends seeking out and comparing residual values for the exact models that you're interested in. That data, along with all of the other factors you'd normally consider, will help guide you to a choice you'll be happy driving for years.
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