Analysis

Best Practices: Back-up Cameras

Posted on: April 7th, 2014 by Editorial Staff

The National Highway Transportation Safety Administration just issued a much-delayed rule requiring backup cameras on all light vehicles by 2018.

For several years now, ALG has recognized the value in many of the safety features that would eventually become standard due to regulations, such as stability control and side airbags. While anti-lock brakes are not required in the US market, studies have confirmed their value, and there are very few vehicles on which they’re not standard. ALG has determined that, with ABS being a hard add feature, those vehicles that lack ABS suffer a degradation in value of over $200 after 36 months, which can decrease its residual value by up to 2 points. (more…)

March/April 2014 Canada Industry Report

Posted on: March 18th, 2014 by Editorial Staff

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March/April 2014 Industry Report

Posted on: March 4th, 2014 by Editorial Staff

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Best Practices: Bluetooth

Posted on: March 3rd, 2014 by Editorial Staff

SYNCAt ALG, we have the benefit of exposure to a wide range of vehicles in just about every segment on the market. This also means we experience a vast array of in-car technology, which in the past decade has moved from including things like CD players and navigation to an endless range of safety, comfort and entertainment options.

In this new blog series, we’ll explore some of the ways that automotive brands manage to integrate and execute these increasingly complex features. We’ll show you the best practices that make the cabin experience better, and we’ll politely point out some of the ways that current executions could improve.

The first feature we’ll tackle is one that is becoming de rigeur for the latest generation of vehicles, as more and more drivers carry their music with them on a mobile device. No longer just for carrying on a hands-free phone conversation, Bluetooth lets you stream media stored on your device or straight from the Internet, through apps like Pandora and Spotify. (more…)

ALG 101: Soft Add Calculations

Posted on: February 14th, 2014 by Editorial Staff

alg101This post expands on some principles examined in previous posts, including hard adds versus soft adds and the residual percentage calculation. If you haven’t read those, it may be helpful to review them first.

As we explored previously, soft add calculations are an integral part of our residual forecast. They help inflate the denominator of the residual calculation to account for equipment that’s not already baked in–”non-typical” equipment with a take rate under 50%. If a buyer selects a whole array of equipment that inflates the MSRP but is not expected to retain much in the used market, this factor helps to control for the fact that the residual percentage will still be applied to the inflated MSRP.

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January/February 2014 Canada Industry Report

Posted on: January 24th, 2014 by Editorial Staff

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January/February 2014 Industry Report

Posted on: January 7th, 2014 by Randy Lioz

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The Discount Balance

Posted on: December 26th, 2013 by Editorial Staff

CollegeAn article in yesterday’s New York Times discusses the discount game among institutions of higher education, citing the fact that the average private college student paid a bit more than half of the retail price of their college tuition last year. The pricing question is a difficult one in any industry, and the automotive sector has struggled with it for years. Is it better to set price high and give hefty discounts to convince customers they’re getting a great deal, or should you set price low to be able to advertise an attractive entry point and avoid the difficult downward spiral that can occur with discount competition.

Discounting is an entrenched practice in businesses around the world because it helps to achieve price discrimination. Contrary to pop economics, price discrimination is de facto legal, with every industry taking part. Perhaps the best-known example is airlines, which practice it in many different ways, with different pricing based on factors ranging from timing of purchase to ticket class to loyalty programs. But any industry that offers different pricing based on someone’s location along the demand curve benefits from price discrimination. The problem is the unintended consequences of getting buyers used to “the deal”. (more…)

2014 Land Rover Range Rover: Long or Short?

Posted on: December 18th, 2013 by Editorial Staff

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At the 2013 Los Angeles Auto Show, Land Rover announced a long-wheelbase variant of its iconic full-size luxury off-roader. An additional 7.3” of wheelbase will demand another $5,200 from buyers’ wallets, so we wondered, would the added length hold significant value at the end of a lease?

Whereas other long-wheelbase SUVs add space for families in the 3rd row or cargo area, a 3rd row remains unavailable on the Range Rover.  Today’s LWB, like the County LWB variant of the original, first-generation Range Rover, exclusively focuses its space surplus on delivering a satisfying 2nd row seating experience. (more…)

Porsche’s Latest Gamble

Posted on: December 16th, 2013 by Editorial Staff

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Historically, the Porsche brand has catered to an exclusive niche market, positioned at the very top of the luxury sector, closely straddling the line between luxury brands and exotics. Porsche built its reputation on selling speedy sports cars; its flagship 911 has had the second longest continuous production run among sports cars. (more…)

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