Reliability equals Value

The one factor that bugged me about the “Drive Free for Life” plan was the lack of any mention of choice of car in the equation of moving up in vehicles. If you have a bad choice in vehicle it could have an effect on your bottom line. One factor I would like to focus on is reliability.

Avoid Issues and Limit Risk

Often people don’t factor in reliability when purchasing a car. This is a universal factor which should be taken into account no matter what car you get whether new or used, compact electric or diesel bus, etc. I’m a firm believer in momentum building and working out issues to keep my momentum from stopping. Having to repair a car slows momentum both financially and time wise.  The plain truth is I prefer to avoid issues and limit risk. Having a car break down at the least opportune moment can be risky for me or worse my wife.

What are the Costs?

There is a big gap in the reliability of a vehicle in model and manufacturer. Keep in mind these factors are in constant flux and change all the time.

Value is also not just a function of cost.

 

1986_YUGO_$3990

1986 YUGO $3990

The cost of a new Yugo was $3990 (1986 dollars in are about $8,360 in 2013) The MPG of the 1986 YUGO was 22 city / 29 highway (25 combined). This seems pretty good, considering the year it was made. When you look into the reliability you find a different story.

Yugo Owners Manual:

One critical maintenance issue specific to the Yugo was the need for regular replacement of the interference engine’s timing belt — every 40,000 miles (64,000 km). In a non-interference engine, timing belt failure does not cause further damage to the engine. In an interference engine, however, timing belt failure disrupts synchronization between pistons and valves, causing them to smash into each other (hence the name interference engine), thus destroying the engine.

NHTSA:

If you got into a crash at 25mph, the car would cost two thirds of the original value to repair, and if your smart enough to know what that means…that’s totaled to most insurance companies.

Time Magazine:

The Yugo was voted ” worst car of the millennium“.

 

If you compare the of today and see what is available:

1986 YUGO

$8,360 dollars 0 miles, MPG 22 city /29 highway (25 combined)

VS

2000 Acura  3.2 TL

$6981 dollars 65,215 miles The MPG was 19 city / 29 highway (23 combined)*

*car spotted on a local craigslist listing

In the reliability department the used Acura is light years ahead of the YUGO. The above info from the crash results the YUGO would be totaled and the Acura would be repairable. Also the timing belt needing replacement after a mere 40K miles otherwise the car is totaled- Wow. I know this is an extreme case but, I wanted it to be easily illustrated that the reliability has a direct correlation to the cost.The difference of cost will effect the effectiveness of the “WAVE-B Free Ride Project”. There are multiple avenues to check a car out for reliability. The first one is look at the latest issue of Consumer Reports which ranks the cars reliability. (The April  auto issue.)

Who Makes Reliability?

Reliability of every car drops after 10 years of age. This is a general rule of thumb and it doesn’t matter which manufacturer it is. Another factor is the reliability of the manufacturer. In 2009 Consumer Reports ranked the reliability by brand. (Although keep in mind some models may be lower or higher ranked then their brand and vary year to year.)

Consumer Reports Top – 5
Scion
Acura
Honda
Toyota
Lexus

Consumer Reports Bottom – 5
Dodge
Cadillac
Chrysler
Saturn
Land Rover

The bottom line is do your homework on reliability to minimize your risk and costs when picking a vehicle.

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