New Car Features - s3.amazonaws.coms3.amazonaws.com/ss-usa/companies/MzQwNjYyNAcA/uploads/New-… · NNNew NCaerFetCusu:Tb:ublublublusuooTufbnIuhFCikuhC,i’xpucCmvkug imC,iu

New Car Features: The good, the bad, and the expensive

Table of Contents

2. Why would you pay for trim levels?

3. Do trim options affect warranty and insurance?

Conclusion

1. What are trim levels?

Introduction

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To some people, the cars they drive are functional modes of getting from A to B. To others, their car is an extension of their personality, their personal brand, their message to the world… or at least to other drivers on the road (“Get out of the way” and “My car is better than your car” being two of the more popular messages…). Each driver has a requirement of what they expect when they walk into an auto showroom – not just the make and model of the car, but what the car is going to do for their lifestyle when they drive off in it.

This is where car trim levels play a huge role in customising your experience of your car. Not only are trim levels distinguishable by the added extras, but this is where the perception of value is carefully manufactured so that when you buy the more expensive car (with its sunroof, cruise control, seat warmers, climate control, built-in Bluetooth car kit, and GPS), you don’t mind paying the higher price – since it’s a tangible upgrade on your lifestyle that you wouldn’t experience with an entry-level model.

In this ebook, we’ll explore the concept of trim levels, showing why car manufacturers offer them, and whether the additional cost in the more sporty or luxurious trim levels are worth the added expense.

Introduction

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New Car Features: The good, the bad, and the expensive www.miway.co.za I 0860 64 64 64 I 338 16th Road, Randjes Park, Midrand MiWay Insurance Limited is an Authorised Financial Services Provider (Licence number:33970).

In the greater hierarchy of new car shopping, the process of elimination goes as follows:

• First, you choose your desired car make – let’s call it Volkswagen.• Second, choose the car model – this is usually where people’s tastes vary widely. Not

only do you get the Volkswagen Beetle, CC, e-Golf, Eos, Golf (GTI, R, SportWagen, etc.), Jetta, Passat, Tiguan and Touareg, and so forth, you also get various year models.

• Third, choose the trim levels, which include optional extras to make your ride more in line with your tastes.

Trim levels – let’s be more specificTrim levels refer specifically to car models that are manufactured within the same model range, yet have different features – and most often, the more extra features you have, the more expensive the model.

For instance, the ever-popular Volkswagen Polo Hatch range includes the Trendline, Comfortline, Highline, Cross, BlueMotion, and GTI. The Trendline is the base model upon which all the other models build in terms of looks (interior and exterior), performance, safety, entertainment features, lights, electronics, convenience factors, etc.

Most vehicle manufacturers have model ranges like this – with an entry level model to set the tone, and ever increasing trim levels to tempt car buyers into increasing their investment into their comfort and style on four wheels.

What are trim levels?1.

OptionsSometimes, when you pick a car model with a particular trim level, there could be a feature you really want that’s excluded from that model. Options are individual features that the manufacturer may offer as purchasable extras, which could include:• built-in GPS• sunroof• leather seats, and custom finishing on the dashboard and steering wheel• a specific entertainment system• alloy wheels• parking cameras• lane assist• climate control system• xenon headlights, etc.

Depending on what your car dealer of choice can offer you, the list of possible options could be seemingly endless. That’s why it may be more economical to go with…

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PackagesWhen options are grouped together, their installation is seen as a singular upgrade at one price, so it will be more economical (per option) to choose an extra package rather than just one or two options. For instance, if you want the base model in a certain vehicle range, but you travel frequently on sales calls, you could choose a tech package, which may include:• adaptive cruise control (to reduce your chances of a fender bender, because who’s got

time for that when you’re making sales?!)• GPS (to help you out in unfamiliar territory)• xenon headlights (to see much better in the dark on your way back from closing the deal)

A cosmetic package may include options like:• paint options (for a matt finish or a pearlescent glow,

depending on your preference)• leather or upholstery options inside the car• hard- or soft-top roofs for convertible cars

A cold-weather package would include luxuries such as:• climate control • heated seats• headlight washers• all-weather floor mats (so there’s no slipping when you

get into and out of your car, and no dirt transfer to the upholstery during muddy season)

A performance package would include go-faster options such as:• better engine power and torque• turbocharger • larger gearbox• better exhaust system (vroom, vroom!) • body cosmetics to make the car’s appearance suit its

performance – including a special badge, spoilers, bonnet airdam, etc.

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How do you know what trim level you’re getting?Trim levels are either denoted by specific naming conventions (as the Trendline, Comfortline, Highline, Cross, BlueMotion, and GTI above), or with abbreviated designations. You may be familiar with designations like GTI or have seen other badges with distinctive lettering and simply accepted them as model ranges without really understanding their implication.

Consider the lettering for higher end brands such as Lexus and Mercedes, and what the following could mean for their enhanced trim levels:

Badge Means what As seen on

L base Toyota Sienna

DX deluxe Honda Civic

LX luxury Honda Civic

CE classic edition, custom edition Toyota Camry

LE luxury edition Toyota Sienna, Camry

DL deluxe Volvo

GL grade level, grand luxe Ford Falcon

GLE grade level extra Hyundai

LS luxury sport, luxury special, luxury standard, luxury sedan, luxury saloon

Lexus, Chevrolet

EX extra Honda Civic

SE sport edition, special edition Toyota Sienna, Dodge, Ford Focus

SL standard level Nissan

SLE standard level extra GMC

SLT standard level touring GMC

SV special version Mazda3, Nissan

LT mid-level trim Chevrolet

LTD limited Toyota

LTZ luxury touring special Chevrolet

GT gran turismo, grand touring Ford, BMW

XLT extra level touring Ford Expedition

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2.

It’s difficult enough to decide whether to buy a BMW, VW or Mercedes; Audi, Hyundai, or Ferrari… Now there’s all this choice in terms of trim levels, ranging from the basic models to high-end luxury and high-performance versions of the same model range. What would YOU pay for?

Let’s take a look at some trim options and how they affect your car and its value in the long run:

a. Body TypeBased on 2015’s car-buying trends, it seems like South Africans have a preference for hatchback cars with their compact features, extended rooflines and more sporty looks – with four out of the top five purchased cars in 2015 being 5-door hatchbacks. Sedans usually feature larger interiors and a deeper boot space – for burgeoning families and all their extras, and drivers who need to ferry more cargo, whether for work or play.

Hatchback?While proponents of the hatchback may argue that their cars have more cargo space than their sedan counterparts, this is usually only true when the hatchback’s backseats are folded down, meaning that there’s a compromise on rear passenger space. Whether this is of value to you will depend entirely on whether you’ll drive frequently with more passengers or more gear, but is worth the consideration from a lifestyle point of view. One downside to the hatchback’s boot is that usually its contents are visible from the outside, where a sedan offers a concealed cargo space.

Sedan?While there are plenty of variations in terms of hatchbacks and sedans (with hybridised versions creating less of a distinction between the two classes of vehicle), most sedans are larger than their hatchback counterparts. Their dedicated boot space is larger, they usually have a longer wheelbase (offering rear passengers more legroom) and have larger fuel tanks to give the vehicle a longer range. Typically this increases the price of the sedan (versus the hatchback), but it also means that sedans carry their value well and sellers can expect favourable resale value for their vehicles.

Why would you pay for trim levels?

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b. Engine Size and Fuel TypeDiesel or Petrol? It’s well-known that diesel engines give you more bang for your buck when it comes to fuel efficiency, but that they are very bad for the environment. Even though diesel vehicles come with “particle traps”, they still don’t prevent diesel engines from emitting nitrogen oxide (NO2) and carcinogenic polyaromatic hydrocarbons (PAHs) (benzo a-pyrene (BaP) in particular).

European politicians are looking at laws to improve air quality in their countries – with the mayor of Paris, Anne Hidalgo, wanting to ban diesel cars altogether by 2020.

That’s not to say that petrol engines are eco-friendly by nature (no pun intended), but the once-sainted fuel economy of the diesel engine is now marred by its dirty reputation. What about biodiesel? Biodiesel may be considered more environmentally friendly, as it’s made from recycled vegetable oil, but if that oil is recycled from palm oil, you need to be aware of the massively destructive deforestation and decimation of the orangutan population in Asia in order to grow crops for palm oil.

The rising cost of fuel makes this a tough choice for car buyers – do you save money at the cost of damaging the environment?

Engine Size – is bigger, better? Whether 1.0, 1.3, 1.4, 1.8, or 2.0 (etc.), the size of the engine beneath your car’s bonnet largely determines the price you’ll be paying for your car. Larger engines are typically more expensive as they offer higher performance (quicker acceleration, higher top speed, and more pulling capability), while smaller engines are considered more eco-friendly, since they don’t burn up as much fuel as a high-capacity engine over the same distance. However, go too small – like an 800cc engine – and what you save in fuel economy, you lose in torque, and lower torque means higher fuel consumption, especially on the uphills!

Your choice of a larger or smaller engine will be largely personal – it depends on what you’ll be doing with your car, how far and often you’ll be driving, and whether you can afford the running costs of a fuel-guzzling turbo-charged performance car, or will benefit from the fuel efficiency of a smaller-engined, eco-friendly run-about on four wheels. Smaller engines will bring down vehicle prices, but will have an impact on their resale value, with the second-hand or trade-in market seeing a smaller car as the “cheap” option compared to cars with larger engines in the same range.

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Car manufacturers are also being quite innovative on this front, having developed eco-friendly performance cars for those drivers who enjoy speed with an environmental conscience. Just think of Ford’s EcoBoost, which has a 20 % fuel economy improvement (Eco) while offering great performance (Boost); and BMW’s i8, dubbed “the first eco-friendly supercar” with its fuel/electric hybrid engine system.

c. Gearbox: Manual or automatic?In South Africa, cars with manual gearboxes (“stick shift”) are more prevalent than cars with automatic gearboxes – which brings a few factors into play that will affect the sale and long-term costs between the two options.

Manual gears offer the driver far more control over the vehicle’s speed and manoeuvrability, especially in city traffic that requires deft driving in a fast-paced environment. And, if you are conscious of your fuel economy and reflect this in your driving habits, a manual transmission will be 5 – 15 % cheaper on fuel too. Maintenance on a manual gearbox is also cheaper, with automatic gearboxes needing to be serviced more regularly, and at a greater expense because they’re not as easy to work on as manuals. Manual gearboxes are also lighter than automatic gearboxes, and they don’t tend to overheat as easily as automatics.

So what do automatic gearboxes have going for them? Heavy, stop-start traffic is much easier and more comfortable to manage with an automatic transmission. Automatic cars are easier to drive and require fewer limbs to operate than manual gears, and come with the “cool” factor of smooth gear changes (although seasoned manual drivers may argue this one).

Automatic cars are more expensive both on the showroom floor and in the workshop, so the choice of gearbox boils down to availability on the model of the car you want, and whether you’re prepared to foot the bill.

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Metallic paint jobs are offered as an upgrade when you buy a new car and come as an added expense, but are usually worth it for this high-quality, shinier finish. Upon resale, a metallic paint job will definitely appear more appealing than the flat, solid coat of the standard paint job. And – while offering no improvement on performance – this aesthetic will affect the resale cost of your car, especially since it hides any minor chips and damage, much better than a solid coat.

The downside is that if your car is involved in an accident or someone scrapes your fender in the parking lot, metallic paint is much more difficult to match and will be visible if repairers can’t get it right. This can negatively influence the value of your car – especially on resale.

Pearlescent paint not only produces a shine, but can actually change the colour of your car at certain angles, producing a magical effect in the sunlight and drawing people’s attention to your pride and joy. Pearlescent options are offered standard on some car ranges, making them somewhat more expensive, yet fantastically more appealing. However, as with metallic paint, you can expect much higher repair costs with the risk that the repaired paint won’t match the undamaged paint 100%.

Matte finishes are the darker and more daring cousin of metallic and pearlescent paint, and they convey the edgy vibe of a far more customised paint job. Since matte paint is very niche, it does carry a higher price tag than both standard and metallic colour, but many owners of matte-painted cars claim that it’s easier to keep clean as long as the right products are used. Similarly, matte paint is expensive on repairs because of the need to match not only colour, but texture too.

d. Paint Job TypesWhile having nothing to do with performance, the type of paint job on a car can influence its value based on the quality of the paint and the perception of the buyer. Most cars come with a standard paint job consisting of solid colour in a non-metallic paint. These are practical, yet flat, and don’t add to the cost of the car or really give the car much personality.

Enter the metallic paint job, with its cousins: the pearlescent and matte finishes.

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e. Interior optionsWhen it comes to leather vs synthetic/fabric upholstery, the general perception is that leather is a more expensive “nice-to-have” without much consideration being given to the practical benefits of leather.

Leather looks good and it can keep on looking good for many years with the right kind of care, compared to cloth or vinyl upholstery, which shows its wear and tear over time, no matter how much vacuuming and steam-cleaning you do. However, you’ll pay a lot more for leather in comparison, but for the leather-lovers, this is a worthwhile expense, at it significantly improves resale value compared to its cloth-interior counterparts.

Leather is easier to clean, especially when children are unleashed on the backseat of your car, as spills can simply be wiped up. Cloth interiors take a lot more damage from children and even if you steam-clean the backseat where little Suzie spilled a pot of yoghurt and didn’t tell you for a week (WHAT is that SMELL?!), it’s just not the same again.

Aside from expense, the only downside to leather is that it can get incredibly hot in summer and bone-chillingly cold in winter… nothing that a shade cloth and seat warmers can’t mitigate, though.

f. Headlight optionsMost cars come standard with halogen headlights, but innovative lighting technology for vehicles means that car owners now have the choice of better tech for their headlights, which impact the lifespan and energy efficiency of their car lighting.

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Halogen headlights come with a long lifespan of around 1 000 hours and are fairly cheap to manufacture, which makes them ideal for the majority of the automotive market. The downside to halogen lights is that they emit large amounts of heat, which isn’t very efficient if the heat is a by-product of the lighting.

Xenon headlights, on the other hand, offer an even longer lifespan than halogen bulbs, lasting up to around 2 000 hours of normal use. They are much brighter than halogen bulbs, but this is a disadvantage for oncoming traffic, as xenon headlights can be very distracting. Since xenon headlights burn cooler than halogen, they are more energy-efficient, but they are more expensive as the production costs

are higher... and they may even contain harmful materials such as mercury, which can be hazardous to humans if leaked into the environment.

LED headlights are fantastic because they are low-powered lights that don’t need a warm-up period before they emit their full lighting capacity. Since LEDs are small, manufacturers can get very creative with their configurations and some eye-catching shapes adorn car models that come standard with LEDs (just think of the Audi R8). Unfortunately LEDs are not as bright as xenon headlights, and they also generate high heat around the emitter, which can damage adjacent parts.

g. SunroofWhen it comes to trim options that hold their resale value, a sunroof is one option car salespeople can attest to, which increases a car’s value. Car buyers will spend money on the things that bring them a practical as well as comfortable driving experience, and many buyers expect the comfort of a sunroof as a standard feature on their cars of choice.

While resale value is a great reason to choose a sunroof in your new car trim, it does come with a few risk factors. Left open, it can be a security and a weather risk, especially if you park outside and don’t expect that sudden afternoon downpour. Hail also poses a risk to sunroofs, but it will not impact the resale value – buyers will pay more for a car with a sunroof than one without.

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h. Maintenance plans and service plansEvery motor vehicle needs regular servicing to ensure that it runs optimally and that parts suffering wear and tear can be replaced, to avoid unexpected breakdowns due to part failures. Most cars today come with standard features that were considered high-end in the past, which also require regular specialised maintenance. Servicing your car can run into the thousands of rands – an expense that not many car owners put aside money for and which can hurt your wallet, especially if something unexpected needs to be seen to during a service.

This is where maintenance plans and service plans come in handy, with many options built into the sale price of the car, with conditions. Sometimes maintenance plans and service plans are one in the same thing, but be very careful of the wording and understand what you’re getting when your car dealer offers you one or the other, or both.

Typically, a service plan will either be valid for the duration of time (three years, five years, etc.) or the kilometres on the odometer (50 000 km, 80 000 km, etc.), and includes parts and labour during servicing. It does not cover the cost of repairing defective car parts or wear and tear on parts like the clutch, exhaust, headlight globes, brake pads, shock absorbers etc.

A maintenance plan, however, will cover such wear and tear, but be sure to read the fine print, as not all maintenance plans also cover the cost of servicing and are only offered as a top-up to the uninsured wear and tear of certain car parts.

When considering whether service plans, maintenance plans, and extended warranties affect the value of your car, it’s important to research the history of the make and model you are interested in buying, the cost of repairable parts, and to get objective input as to whether these plans are worth it. The alternative is to consider whether you’ll be able to afford the possible servicing and replacement costs should anything unforeseen happen to your car.

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i. Safety features

While technology has not yet taken us to a point where self-driving cars can autonomously get us safely from point A to point B, the safety features on today’s cars are astounding; many of which are worth investing in as trim options, especially if you’re travelling with children or require driving assistance. Safety features to look out for currently include:

Lane departure warning systemsAlso known as “Lane Assist” by Volkswagen, this feature mitigates the risk of accidents caused by drivers unintentionally steering out of their lanes due to drowsiness or distraction (yes, texting and driving is a HUGE no-no). Lane departure warning systems can either utilise gently counter-steering, a vibration in the steering wheel, or flashing lights and a warning sound to alert drivers to their wandering wheels.

The one downside to this safety feature is that it won’t work if it can’t detect road markings, so you may have a problem on poorly marked road surfaces. Automated brakingAs part of the umbrella of collision-avoidance systems (lane departure warning systems included), automated braking is used to reduce the risk of your

car suffering a collision. These systems include cameras, lasers and radar (take that, James Bond), as well as the kind of artificial intelligence (AI) to detect the probability of an accident and take corrective action, such as applying the brakes when the driver fails to do so. Sometimes this automated braking will be used to avoid a fender bender in bumper-to-bumper city traffic; or a larger collision at a higher speed, by pre-loading the brakes for a harder stop if necessary.

Automated parkingAudi’s 2016 Q7 comes with a parking feature that self-steers into small parking spaces – a welcome feature when cars get bigger as parking spots get smaller. Not only does automated/assisted parking facilitate more efficient manoeuvrability, but you can avoid the hassle of accidently scraping your fender (and paying to repair your pearlescent paint job…).

While all of these safety features improve the safety and pleasure of your driving experience, greatly reducing the possibility of personal injury and vehicular damage, convenience always comes at a cost. One day these features will come standard on most cars (as power steering, ABS and airbags were once special features and are now

standard), but until then, they’re considered “extra” and will cost more to install, service and repair.

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Higher end trim levels on cars may include longer warranties, better service plans and ultimately more peace of mind. However, since these are included in a higher price, they may also affect the cost of insuring the vehicle.

Trim levels affect insurance premiumsCar insurance premiums are based on: • retail value (the cost your car retails for on the

showroom floor)• book value (the price that a dealership will pay

you for your car before adding a mark-up of their own), or

• market value – the average between the two.

A higher trim level vehicle will be more expensive than the base model, and certain trim options require additional cover, so you can anticipate a higher insurance premium. However, consider the cost of replacing your car if it was written off in an accident or stolen – it’s worth insuring your assets with high enough comprehensive cover to replace your vehicle at the trim level you had before.

Insurance premiums are also calculated on your risk profile as a driver – so if your trim level includes a safety package that helps you to avoid accidents and reduce your driving risk, it’s a win-win for you and your insurer!

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3. Do trim options affect warranty and insurance?


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Nowadays, we don’t only buy cars to get us from A to B, but to also get us there in style, safety and making a statement. Choosing specific trim levels for your car is one way of customising your driving experience, but what is valuable to you in terms of trim, and how does resale value factor into your choice of trim investment?

Whether you choose certain trim levels to address your driving requirements for aesthetics, safety, performance, comfort or space, the question we’ve been asking throughout this ebook is:

What’s it worth to you? What are you prepared to pay for when buying your next car? Should you be spending extra money on these extra features? And if so, which ones?

This ebook has covered a wide range of trim options, as well as the advantages and disadvantages of forking out cash to include them on, in, and around your car. The rest of the decision-making is up to you.

MiWay gives you the freedom to customise your car insurance. Visit www.miway.co.za to complete a tailor-made quote and earn cash rewards by buying your car insurance online. Ts&Cs Apply.

Conclusion


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