kia spectra vs. honda civic a group 5 presentation
Post on 22-Dec-2015
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TRANSCRIPT
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Kia Spectra Vs. Honda Civic
A Group 5 Presentation
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Team Members
Jose Perez-Organizer/Techie Meredith Mitchell-Summarizer/Techie Wai Chung Ching-
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Scenario
An economically challenged engineering student at Cal Poly Pomona, a commuter school, is searching to buy a reliable, cool looking car that fits in his/her budget and gets excellent gas mileage.
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Assumptions
Excellent credit Clean driving record 1200 miles/month Cost of gas-$3/gal 5 Year Loan
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Models
2005 Honda Civic Ex 4Dr Sedan
Manual 5 Sp Standard Package
2005 Kia Spectra Ex 4Dr Sedan
Manual 5 Sp Standard Package
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Costs
Kia Sprectra MSRP
$14390 Insurance
$1418.75
Honda Civic MSRP
$17260 Insurance
$1756.91
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Gas Mileage
Spectra Highway-32 City-24
Cost 14400 mi/yr $3/gal =$1542.86/yr
Civic Highway-37 City-32
Cost 14400 mi/yr $3/gal =$1234.29/yr
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Repair Costs
Kia Spectra Fuel Pump
$145.99+89.99 L Water Pump
$51.99+89.00 L Brake Calipers
$64.99+89.99 L
Honda Civic Fuel Pump
$214.99+69.99 L Water Pump
$82.99+184.00 L Brake Calipers
$103.99+115.00 L
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Financing Options
Down Payment $0 $1500 $2500
APR %0 %4.9 %8.0
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Salvage Value
Spectra Only 22% of MSRP
$3165.80
Civic 44% MSRP
$7594.40
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Economic Analysis
Used EUAC Estimated Uniform Annual Cost Lower the EUAC the better
Used Excel Found net present value using NPV Function Used –PMT Function for EUAC Assumed MARR of 6%
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EUAC at Diff. APR
At $2500 Down
APR Kia EUAC Civic EUAC
0.0 5545.37 5398.38
4.9 5853.39 5780.74
8.0 6060.41 6037.73
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Results/Sensitivity Analysis
Honda Civic had lower EUAC than Spectra for each APR and Down Payment
Higher down payment, higher EUAC (slightly) Down payment didn’t effect difference in
EUAC by much
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Effect of Down Payment on EUAC
Down Payment Vs. EUAC
52005300540055005600570058005900600061006200
0 500 1000 1500 2000 2500 3000
Down Payment ($)
EU
AC
($)
0 APR Civic
0 APR KIA
4.9 APR Civic
4.9 APR Kia
8.0 APR Civic
8.0 APR Kia
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More Results
At higher APR, EUAC became close, but Civic still lower
Higher APR higher EUAC (much more drastically)
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Effect of APR on EUAC
APR Vs. EUAC
52005300540055005600570058005900600061006200
0 2 4 6 8 10
APR (%)
EUA
C ($
)
0 Down Civic
0 Down Kia
1500 Down Civic
1500 Down Kia
2500 Down Civic
2500 Down Kia
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The Kia Spectra may be Cheaper, but the economically desirable option is the
Honda Civic
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What if Kia Resale=Honda Resale 5 Yrs in the Future?
Salvage Value (% of MSRP) Vs. EUAC
0
1000
2000
3000
4000
5000
6000
7000
0 10 20 30 40 50 60
% MSRP
EU
AC
($)
Honda
Kia
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When salvage values are adjusted.. At same % MSRP, Kia becomes
economically desireable option-though not by much.
As of now, Kia’s have very poor resale value Honda’s are in the top 10 list of cars that
keep their value over time.
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One thing to keep in mind…
Kia had 0 down 0 APR financing available Honda didn’t At 0 down 0 monthly payment, Kia
EUAC=$5451.87 At 4.9% and 2500 down, Honda
EUAC=$5780.74
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If you want a civic, wait until they offer special financing
Usually Labor Day, Memorial Day or July 4th
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But….Economics Isn’t Everything Upgrades Available
Body Kits? Overall Look and Feel
Both look similar on outside Kia has cheap interior
See carpet edges Knobs, buttons cheap plastic
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More to Consider
Government Safety Ratings Civic
5 star Frontal, 4 star rollover and side ratings Spectra
4 star Frontal, 4 star side (3 for rear seat), rollover TBD
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And Finally
Warranty Information Civic-3 year power train warranty Spectra-5 year power train warranty
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Our Personal Choices
Meredith-Honda Civic Higher MSRP is worth the safety rating
Jose
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Sources
www.kia.com www.rockhonda.com www.insweb.com www.safercar.gov Homework 6 Example
Dr. Rosenkrantz, Fall 2004, Egr 403 Kia of El Monte, Ca Norm Reeves Honda, Norwalk, Ca