Tag Archives: CarMax

Let’s Talk “Payback”

26 Mar

I have read several articles about the Volt and automobile journalist and blog that compare the payback period based on fuel savings over purchasing an “equivalent” vehicle.  One even has put the payback period on the Volt as 27 years.

First – at least for me, I did not make the decision to purchase the Volt based on any kind of payback period or fuel savings.  I bought the car because I found it to be a very interesting car and it was reasonable in price and looked nice.  On driving it the (only) time I drove it immediately prior to signing paperwork, I liked how it felt and the seating.  It was in my price point and got better mileage that what I had been driving previously – but everything that I looked at got better mileage by some bit.

Now, before we go further, let’s discuss the “equivalent” vehicle concept.  Frequently, when people look at this, they choose a car built from the same platform and assume that is an equivalent vehicle.  This works pretty darn well when you are looking at a Toyota Camry vs a Toyota Camry Hybrid.  However, most of the time, comparing the Volt, they use the Chevrolet Cruze Eco.  When you use the Cruze, you are comparing a sub 20,000 dollar car with an over 40,000 dollar car.  I am sorry, but they really are not “equivalent” cars, as no one I have read about really would have considered a Cruze as their next car if they had not purchased the Volt.

Many Volt buyers that I have seen on the Volt Forum I like to watch (www.gm-volt.com/forum/) have been primarily previous European vehicle owners.  There are a some General Motors fans, of course, but they are still traditionally higher end GM vehicle buyers (Corvette, Cadillac, etc).

For my self, the other alternative vehicle would have been less than 2,000 dollars cheaper, still from CarMax.  It would have been a Mercedes C350 Sport.  The car would have had slightly more miles on it, but not a significant amount.  Many of the other people on the forum have stated that if they had not purchased a Volt, they would have purchased 5-serices BMWs, or Infiniti sedans, etc.  In short, for most cars, the Volt, as a 40,000+ dollar car is being purchased instead of another 40,000+ dollar car.

Once you realize this flaw in what the general media is reporting, you should realize that the “payback” model is flawed.  Looking at it this way, the payback becomes something like 0 – 2 years.  People may scratch their heads, but let’s look at new car price:  If I were going to buy a C350 Sport, with navigation, etc  MSRP would be close to 44,000, and the Volt the way I would choose it would be close to 44,000.  For simplicity, we are assuming tax incentives, rebates, etc don’t exist, which actually makes the Volt less expensive for many people.    In this example, the payback period for the Volt is immediate – based on fuel savings.

 

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So How Did I Get Here?

7 Mar

What have I driven, and how have I ended up with a Volt?

I started off with a Dodge Pickup (D100 to be exact) with a 318 C.I. V8.  Great truck, add a shift kit to the transmission and a lucky acquisition with whatever gearing it had in the rear-end and it was actually quite a quick vehicle for the time.  Somehow I started tinkering with vehicles then.  Now before you scoff too much at the idea of a pick-up, you have to remember that in 1978, the Dodge Little Red Express was the fastest American made vehicle 0 to 100 that Car and Driver tested that year (Yes, faster than the Corvette that year).  Of course it was a 360 C.I. engine with a 4 barrel carburetor instead of the 2 barrel that was on my little 318, but the basic block was the same. Now you see where the ideas started from?  Yes, my truck ended up with the anti-sway bars (or which ever term you prefer for them) that were production on some other models, the factory high-rise 4 barrel intake and carburetor and some other goodies.  In short it managed to pack a surprise, but most importantly, I had fun playing with it.  It is still the only Dodge pickup of the pre-1978 range I have ever seen with a factory tachometer and oil-pressure gauge in the dash.  Of course that wasn’t how it started life.

I “graduated” from that to a 1985 Ford Mustang GT.  The last year with the 4 barrel carburetor, 5 speed manual transmission.  And I couldn’t leave that alone either, it ended up with some goodies from the Mustang SVO version and some later model improvements.

Life got a bit calmer after the Mustang (and fortunately I managed not to kill myself with it) as I got older.  I have had four Honda Accords (1988, 1989, 1993, and 2002), a Mercedes 190 2.6, and a Chrysler Concord.  I liked all of them, but then I end up liking almost everything I drive.

Until recently the garage has had a Mercedes SLK320 with a 6-speed Manual that belongs to my wife and a C230 SportCoupe, which was mine.  Nearing 200,000 miles on the C230, we decided it was time for a replacement, and I would have expected it to be a newer body style C-class Mercedes.  The Coupe had Bluetooth, Navigation, Voice Control plus all the normal options and leather interior – for a 2002 car it was *very* well equipped and I had a great relationship with the Dealership and the Service Adviser.  I had no thoughts other than a newer version of the same car.

The Chevrolet Volt had caught my eye when it came out, mainly because I like the idea of an all-electric car using the gas-fueled generator to extend the range provided by a battery.  This is a proven concept really, as the diesel locomotives you see going by are actually electric.  They have used DC and are moving toward AC current for reasons I don’t remember, but I am sure related to efficiency.  But in short, it isn’t the diesel engine that is actually turning the wheels for the train.  The diesel is used to power a generator, which in turn produces the current that drives the electric motors.  So the Volt is a lot like a train.  I sort of liked that idea.

However, Chevrolet has had a downside to me.  My general impression of Chevrolet started to be formed with mid-1970 vehicles.  I liked the Camaro’s and Z28s of the late 70’s, but the quality kept going downhill.  I suppose they were not any worse than the Mustang I drove at the time, but part of it was perception.  General Motors got into the low-cost vehicles and low cost vehicles are not usually maintained well by their owners — so they look like crap.  Those particular cars were also made with cheap materials to keep the cost down, but that didn’t help with the impression.  I will freely admit that this is not completely General Motor’s fault, but perception is important.

As I got older, I found, as many people did that the Japanese car manufacturers, and Honda in particular made a very high quality long lasting product.  I also began to develop a distaste for the UAW.  Side point here, but I really am not a fan of the union side of things.  I think they have been a problem with American manufacturing in general.  They may have been needed at one point in history, but I don’t think they are still needed.  Plus I just simply disagree with some things – for example, if you are a welder on an assembly line, I will agree that as you gain experience you are more valuable to the company, speed of production and such – but only to a point.  So the idea of continually getting salary increases after that point is not in the best interest of the company, nor the consumer.  And there are the typical horror stories (which I am sure are exaggerated) of “I can’t pick that up, because that isn’t part of my job” silliness.  I also just can’t grasp the idea of “you have to join a union to work here.”  I guess I am just a product of right-to-work states.  That one concept in particular is my biggest complaint.   So, between the quality difference and the philosophical difference with unions, I found buying non-American vehicles easier.  Before someone points it out, German and Japan manufactures may have unions too, but I am blissfully ignorant.  And do I feel bad on the “not buying American?”  No – they couldn’t compete.

However, the Volt appears to be competitive. All of the above being said, I find American engineers ingenious and very creative when challenged.  American workers are very industrious when allowed to be, and for the most part, I believe they actually want to do more than just perform their “task.”

I still find the dealership experience, be it Ford, Chevrolet/GM, or Chrysler to be much more unpleasant than any of the foriegn manufactures.  But I believe some of this has been because dealerships have been an inherited right that the corporate arm had very little control over, and since the big change up and closing of dealerships between 2008 and 2010, I think this is starting to change.  The corporate entity has more control over how their products are displayed and promoted than ever before, along with the look and feel of the environment.  This is much more like you find the European and Japanese dealerships, where if they don’t meet the standards, they can loose the right to sell that brand.

Do I think that the Chevrolet dealership will ever be as calm and inviting as the Mercedes or BMW dealership?  No, but that is a result of selling 15,000 cars at the low end as opposed to 30,000+ cars as your low end.  You have a higher volume of customers, and you have customers who are less inclined to budget for careful maintenance with the less expensive vehicles.  It just goes with the selected market, and I understand that.  But for comparison: when my C230 was having routine maintenance (read oil-change) done at the dealership when it had 185,000 miles on it, I still got a free loaner car, and it was a newer Mercedes.  But the cost of doing that is both wrapped up in the purchase price of my car, and the cost of the service at the dealership.

So on to how I started looking at the Volt.   Instead of buying new, I was going to CarMax.  I like CarMax a lot – good vehicles, good people, low pressure overall, and a very solid extended warranty.  As a family we have purchased quite a few vehicles from them and have never had problems with a claim.  My initial options were a newer Mercedes or maybe a BMW.  Then I happened to stumble across an Infiniti G37 Coupe Sport on their website.  After driving that, it opened up the non-European doors and I had to look at a bunch of other things.  I liked that G37 a lot, but it had more miles than I wanted.  In the looking I stumbled across a Chevrolet Volt.  Very much by accident, but I remembered I thought they were neat, so I looked closer.  And in looking I found a decent deal – a 2011 Volt with fair miles on it, a lot of factory warranty left, every option available and everything I’d want, in a color I liked.  The only problem was that it was in Chicago, and I had never even driven a Volt.  Well, really neither was a problem since CarMax will do the transfer just for the cost, and then I can drive it and see if I like it.  I decided that was worth the risk, so here I am 300 or so dollars poorer, and going to get to drive it in the next few hours.