An Understanding of Car Brands and Car Prices

1/25/2022

Thomas E. Kersh

Cars have become an everyday necessity to almost every American. With that being said, the American car market, manufacturing, and history have come a long way, from building the first production line, to the first American car to win the 24 of le Mans in 1966, to now where every American can afford a luxury car at an extremely reasonable price with the preferences they build into it. It’s like a Build-A-Bear for cars.

To understand the different pricing of car brands, let's split it up into three categories: High-end, Mid-end, and Low-end.

High-end car manufacturers put premium prices on their cars. These are going to be companies like BMW, Mercedes, Jaguar, Corvette, etc. Companies who put a premium price on their cars mostly due to the badge on the car.

Mid-end cars are companies you would first think of when you get asked about cars. They’ll be companies like Ford, Chevy, Toyota, Honda, Nissan, etc. Car companies who have been around forever and don't put a premium price on the cars but will charge a little bit for the badge on the car for it being so well known.

Then you have Low-end car companies. These are companies who will only make you pay for the car; not the badge on the car. Just because the car is at a discounted price compared to the other companies doesn't mean it lacks in quality. These companies are your Hyundai, Mitsubishi, Subaru, etc. Also, just something to think about with these brands: They make some of the most efficient and powerful cars.

So before I start comparing cars, let me explain to you why most people gravitate more towards expensive brands when the cheaper brands give the same thing. It's called a Veblen Good. A Veblen good is when the price of a product or type of product increases but the quality does not. So it ends up being seen as more of a status symbol. This is also a reason for when we can't judge the quality of a product. We immediately look at the price of it to tell if the product is of good quality.

I'm now going to show and describe to you what I'm talking about using Edmunds car comparison tool. I'm going to compare four different categories of cars. I’ve picked three cars from that category that are extremely similar and that are High-end, Mid-end, and Low-end. Now I'm going to simply compare them.

Mid-size Sedans

The cars I’ve picked out are all 2021 models. They are the Hyundai Elantra SE, Toyota Camry XSE, and the BMW 3 Series 330i. They each have 4-cylinder engines with the BMW being the only one that's turbocharged. The Elantra is a 6-speed while the Camry and Series 3 are 8-speeds. Yet they each have extremely different prices. The Elantra being just under $20,000, the Camry is roughly $30,000, and the BMW is $41,000. With these incredibly large price differences, let's compare other features of each car to see what may justify such a huge price difference.

Next is the warranties that I’ve listed. And the car with the best warranty is Hyundai by a landslide.

Hyundai clearly has the best warranty when compared to the other two vehicles.

Let’s now compare additional features. See chart below:

When comparing the car's additional features, I was surprised to see that the Elantra has very similar features to the Camry and Series 3, which the Camry and Series 3 consider exclusive features. The things that set each apart are little things that wouldn't be an actual selling point. So far the cars are quite similar except for minor features and, of course, the price.

Power and drivetrain specifications are where these cars separate themselves.

The Series 3 is RWD and has the most power, but it is also the heaviest out of the three cars.

The Camry is FWD and is the second-fastest, but it weighs just a little bit less than the Series 3.

The Elantra is FWD, has the least power, but is lightest by almost half a ton.

So a question just for fun: Which of the three is the fastest? It's going to be the turbocharged Series 3 with a 0-60 of 5.4 seconds. The Camry is 8.2 seconds. The Elantra is 8.4 seconds.

The better question is: Why/When are you going to need to go that fast? Chances are: Never. I mean, yes, it's cool to go fast. But not, like, $20,000 cool. It's not intelligent to spend an additional $20,000 for an extra 3 seconds, which works out to $6,666.66 per second. Oh, and Hyundai makes a fast Elantra. It's the 2022 Elantra N. It has a turbocharged 4-cylinder engine with a dual-clutch and 8-speed transmission. Its 0-60 is 5 seconds. The car is only $31,900, which is $10,000 less than the Series 3. So where is your $10,000 going to when building the BMW? It's actually two places on the car: $5,000 to the rear badge, and $5,000 to the front badge.

The vehicles selected for the SUVs are the 2021 CX-5, 2021 Chevy Blazer, and the 2021 Range Rover Velar. I've chosen the trims to where the vehicles are as similar as possible and yet there is still a $12,000 difference between each vehicle. Each car has a turbocharged

4-cylinder engine all from the same year and they’re all AWD. Let's see what warranties and features set them apart from each other.

When comparing the warranties of each car, the Chevy has the best warranty out of the three. So comparing the Range Rover to the Mazda, the Mazda warranty covers the drivetrain more than Range Rover’s warranty. However, Range Rover covers basic and roadside assistance more than the Mazda. With the features, they are identical with only a few minor things being optional between the three. I think it’s kinda funny how heated seats are not standard on the $57,000 Range Rover.

On these vehicles, the engines are identical except for the Mazda, which has a slightly larger engine. They are all turbocharged and are all AWD. The only differences now between the three SUVs are transmission and weight.

The Mazda is a 6-speed, the Chevy is a 9-speed, and the Range Rover is an 8-speed. But here's something about transmissions: The only way you're going to get above sixth gear is if you're going over 85 MPH or you're towing something, which even then you’re probably going to stay in sixth gear.

The curb weight of the vehicles is very similar. The Mazda is 3836 lbs, the Chevy is 4287 lbs, and the Range Rover is 4130 lbs. When it comes to MPG, the Mazda is King giving 24 combined highways and cities, while the Chevy gives 21 MPG, and the Range Rover gives 23 MPG. This makes the Mazda the most powerful, efficient, and lightest of the three cars.

So we ask ourselves the same question as last time: Which car is the fastest? It's the Mazda with a 0-60 of 6.1 seconds. The Range Rover has a 0-60 of 7.1 seconds, and the Chevy has a 0-60 of 7.9-8.1 seconds.

So a quick summary of the SUVs: The Mazda is the cheapest. The Mazda has the same features as the other two cars. The Mazda puts out more power and is faster than the other two. The Mazda is also more efficient. So all in all, this means you’re paying $12,000-$24,000 more for the Chevy and the Ranger Rover, and all you’re getting for that $12,000-$24,000 is a front badge and a rear badge.

This may be the first comparison that's a bit of a reach, but in my opinion, it’s still a good comparison. I've selected the 2022 Subaru BRZ, the 2021 Mercedes C-class, and the 2022 Audi TT. Again, all sports cars and very similar under the hood, yet at three different prices.

Warranties of each car are similar; they'll each cover you for about four years. The cars have similar additional features. The cars have the same features as each other, except for really minor stuff. I mean, there's stuff on the BRZ that is standard and yet is optional on the C-class and you can't even have it on the TT, like adaptive cruise control.

Let's look at the cars mechanical specifications.

This is where they start to look a bit different. The TT and C-class are 2.0 l inline-4s, while the BRZ is a flat 4. A flat 4 is a 4-cylinder piston engine with two banks of cylinders lying on opposite sides of a common crankshaft. This makes the BRZ unique when compared to other coupes. Unfortunately, the cheapest car here is also the least powerful, stock. But with the BRZ, you can take it to a shop and get it tuned and turbocharged for $5,000-$10,000, which can get it from 228hp to anywhere between 350hp to 600hp. Then out of the three cars, the BRZ is the lightest being 2881 lbs, the TT is around 3400 lbs, then the Mercedes is 3600 lbs.

So which of the three cars is the fastest? It's the Audi TT with a 0-60 of 5.2 seconds. But the second-fastest is the BRZ with a 0-60 of 5.4 seconds, and the C-class comes in at 5.5 seconds. The BRZ, which is the cheapest, is only slower by 0.2 seconds to the TT, but is faster than the C-class at 0.1 seconds. But if you were looking to get a fast sports car, why not take the BRZ to a tuner? I mean, it's not uncommon to do that with these types of cars. As I've previously mentioned, the total cost would still be less than the other two cars.

So something I haven't brought up with the other categories is the 5-year ownership cost because it wasn't that noteworthy for the prior comparisons. But looking at the Coupes, it is noteworthy.

I mean, with the Mercedes, you lose almost 2/3 of the value of the car. Then you have to take it to get maintenance, which is an arm and a leg for both the Mercedes and the Audi. Then when that's all said and done, you have to insure your cars. And I don't think your insurance company is going to enjoy hearing you just bought an expensive luxury sports car. Then there's the BRZ, the Japanese coupe with inexpensive parts and so reliable you probably wouldn’t need to maintain it that often. Hell, the BRZ could probably run off soy sauce and Sake and it would still run better than the other two cars.

For pickups, I've selected three modern, fairly similar trucks. They are all 2022 models. They are the Hyundai Santa Cruz SEL, the Toyota Tacoma Limited, and the Ram 1500 Longhorn. Now even though they are similar, they each have a different MSRP.

Immediately comparing warranties, Hyundai blows Ram and Toyota out of the water with how much their warranty covers. Seriously, Hyundai is probably the car manufacturer with the best warranty.

I will say looking at the features, Ram seems better. But when you go onto the actual websites and look at the interior, Ram's interior is very outdated; it looks so gloomy and boring. While the Hyundai interior is more modern and has a better computer interface for the driver. Toyota’s interior is not anything to really talk about, but, I mean, it doesn't even compare to Hyundai’s.

So looking at the engines, it may seem that the Hyundai is outclassed with its

2.5 l inline-4, but it's the only one that's turbocharged. This means that the Hyundai can put out more power than either of the other two pickups, and it has more torque than either of the other V6 pickups the Hyundai is sizing up against. The Hyundai is an 8-speed while the Tacoma is a 6-speed and the Ram is also an 8-speed. The Santa Cruz is AWD, while the Tacoma and Ram are 4x4’s. The Hyundai and the Ram both have a combined 22 MPG while the Tacoma has a combined 20 MPG. The Hyundai is the lightest of the three being 4100 lbs., the Tacoma comes in at 4500 lbs., and the Ram comes in at a whopping 5100 lbs.

So since they’re pickups, they need to have a good towing capacity. The Hyundai has a 3500 lbs. tow rating which can be upgraded with an after-market tow bar increasing its towing capacity to 5000 lbs. The Toyota is rated for a maximum towing amount of 6800 lbs., but off the sales floor is 3500 lbs. The Ram is rated for a maximum weight of 6340 lbs.

So now we ask the fun question: Which is the fastest pickup truck? It's the Hyundai Santa Cruz with a 0-60 of 6.0 seconds. The Ram comes in second with a 0-60 of 6.6 seconds. And then the Toyota Tacoma comes in sluggishly third with a 0-60 of 7.7 seconds.

The Hyundai Santa Cruz is the lowest price of the three pickups. It has the most power and torque of the three. It has the better interface and a more modern look. It does, however, somewhat lack in towing compared to the other two, although it still has a high towing capacity.

The Santa Cruz is the lightest and quickest out of the three. So overall, the Santa Cruz is the best option and it is $7,000 less than the Tacoma and $19,500 less than Ram.

After looking through the different categories of cars and comparing them, it comes down to a very simple concept which is understanding whether or not you're buying a car for the car, or if you're buying the car for the badge.

You shouldn't buy cars as a status symbol. You should either buy a car because it's most practical for your situation or because YOU like it. And you shouldn't buy a car that you know you can't afford. What I mean when I say “if you can't afford,” I mean that you are barely able to make monthly payments; Or if you are paying in cash, go by the rule of “if you can’t buy two, you can’t buy one.” This will help you understand what car to buy.

Many of these “discount” car manufacturers are starting to have the same quality as High-end car manufacturers. So when buying a new car, just be smart and sensible about making the decision.