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Kia Spectra Vs. Honda Civic

Kia Spectra Vs. Honda Civic. A Group 5 Presentation. Team Members. Jose Perez-Organizer/Techie Meredith Mitchell-Summarizer/Techie Wai Chung Ching-. Scenario.

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Kia Spectra Vs. Honda Civic

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

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

  7. 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 Gas Mileage

  8. 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 Repair Costs

  9. Down Payment $0 $1500 $2500 APR %0 %4.9 %8.0 Financing Options

  10. Spectra Only 22% of MSRP $3165.80 Civic 44% MSRP $7594.40 Salvage Value

  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 didn’t 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 Resale=Honda 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, Kia’s have very poor resale value • Honda’s 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 didn’t • At 0 down 0 monthly payment, Kia EUAC=$5451.87 • At 4.9% and 2500 down, Honda EUAC=$5780.74

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

  22. 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

  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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