Kia Spectra Vs. Honda Civic - PowerPoint PPT Presentation

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Kia Spectra Vs. Honda Civic

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... to buy a reliable, cool looking car that fits in his/her budget and gets excellent gas mileage. ... the top 10 list of cars that keep their value over time. ... – PowerPoint PPT presentation

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Title: Kia Spectra Vs. Honda Civic


1
Kia Spectra Vs. Honda Civic
  • A Group 5 Presentation

2
Team Members
  • Jose Perez-Organizer/Techie
  • Meredith Mitchell-Summarizer/Techie
  • Wai Chung Ching-

3
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.

4
Assumptions
  • Excellent credit
  • Clean driving record
  • 1200 miles/month
  • Cost of gas-3/gal
  • 5 Year Loan

5
Models
  • 2005 Honda Civic Ex 4Dr Sedan
  • Manual 5 Sp
  • Standard Package
  • 2005 Kia Spectra Ex 4Dr Sedan
  • Manual 5 Sp
  • Standard Package

6
Costs
  • Kia Sprectra
  • MSRP
  • 14390
  • Insurance
  • 1418.75
  • Honda Civic
  • MSRP
  • 17260
  • Insurance
  • 1756.91

7
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

8
Repair Costs
  • Kia Spectra
  • Fuel Pump
  • 145.9989.99 L
  • Water Pump
  • 51.9989.00 L
  • Brake Calipers
  • 64.9989.99 L
  • Honda Civic
  • Fuel Pump
  • 214.9969.99 L
  • Water Pump
  • 82.99184.00 L
  • Brake Calipers
  • 103.99115.00 L

9
Financing Options
  • Down Payment
  • 0
  • 1500
  • 2500
  • APR
  • 0
  • 4.9
  • 8.0

10
Salvage Value
  • Spectra
  • Only 22 of MSRP
  • 3165.80
  • Civic
  • 44 MSRP
  • 7594.40

11
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

12
EUAC at Diff. APR
13
Results/Sensitivity Analysis
  • Honda Civic had lower EUAC than Spectra for each
    APR and Down Payment
  • Higher down payment, higher EUAC (slightly)
  • Down payment didnt effect difference in EUAC by
    much

14
Effect of Down Payment on EUAC
15
More Results
  • At higher APR, EUAC became close, but Civic still
    lower
  • Higher APR higher EUAC (much more drastically)

16
Effect of APR on EUAC
17
The Kia Spectra may be Cheaper, but the
economically desirable option is the
  • Honda Civic

18
What if Kia ResaleHonda Resale 5 Yrs in the
Future?
19
When salvage values are adjusted..
  • At same MSRP, Kia becomes economically
    desireable option-though not by much.
  • As of now, Kias have very poor resale value
  • Hondas are in the top 10 list of cars that keep
    their value over time.

20
One thing to keep in mind
  • Kia had 0 down 0 APR financing available
  • Honda didnt
  • At 0 down 0 monthly payment, Kia EUAC5451.87
  • At 4.9 and 2500 down, Honda EUAC5780.74

21
If you want a civic, wait until they offer
special financing
  • Usually Labor Day, Memorial Day or July 4th

22
But.Economics Isnt 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

23
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

24
And Finally
  • Warranty Information
  • Civic-3 year power train warranty
  • Spectra-5 year power train warranty

25
Our Personal Choices
  • Meredith-Honda Civic
  • Higher MSRP is worth the safety rating
  • Jose

26
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
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