Breaking the code behind Motor manufacturer’s recommended retail price!
It must be nice, it must be nice, if you’re in the financial position to be considering the purchase of a new Performance vehicle in this current recessionary climate. Or perhaps you’re just like me, always day-dreaming of the next Performance vehicle, but when it comes down to it, you rarely go through with it- as who has the cash these days? But you can always dream? Can’t you?
So being a motoring enthusiast, price conscious by nature, and a data analyst by trade- I’ve developed a formula which might have cracked the code behind why motoring companies price their products the way that they do. And knowing this secret, can potentially help you identify the most ‘bang for your buck’ Performance vehicle the next time you’re in the market for one. Thus helping your hard earned cash go further, or should I say, go faster!?
Sure, before you make any big ticket item purchase, you do your research. You read/watch reviews from so called ‘Motoring professionals’ and for cars of course, you take them on test drives. However motoring reviews are based on other people’s personal opinions, and test drives come down to what the vehicle makes you feel when you’re sat behind the wheel- as of course, if you do have the cash, it’s hard to say no to a Porsche if you’ve ever had the privilege to drive one. But what about a soulless binary method of comparing simular products to each other? What if we left this emotional decision to maths?
I’ve dubbed this formula the ‘Bang for your buck’ equation- how much car/performance are you actually getting for your cash? The formula is as follows:
(Recommended Purchase Price divided by the Vehicle’s Kilowatts of power) divided by the Vehicle’s Torque) multiplied by the Vehicle’s 0-100Km Time equals The Bang for your buck value.
I.e. ($ / K) / Tq) x T = V
And the lower the bang for your buck value is, the more bang you’re getting for your buck! Pretty simple really. Let me give you an example, so you can see the formula in action!
The two rivals in the Hyper hatch segment, is Mercedes Benz’s A45 AMG S pocket rocket, and Audi’s RS3 beast of a hatchback.
If we place the vehicles through the Bang for your buck equation, we learn that:
A45 AMG S ($93,600 / 310Kw) / 500nm) x 3.9secs 0-100Km Time = 2.4
RS3 ($83,800 / 294Kw) / 480nm) x 4.1Secs 0-100Km Time = 2.4
Although the A45’s power on paper seems to have an obvious advantage over the RS3, however you will be paying a premium for that extra push-in-your-back when accelerating off the lights. So when it comes down to it, the two vehicles are neck and neck with an identical 2.4 Bang for your buck value. So your end decision might be, do you prefer 4 interlacing rings, or the three-pronged star? Or do you prefer more power and speed, or do you like to save almost $10K in cash?
Ok, perhaps the Hyper hatch example was not the best example in how the equation can help you in these decisions, as in this first example it’ll come down to your own personal preference to break the deadlock. However this example illustrates why I believe I’ve broken the code behind how Motor manufacturers price their Performance vehicles. I say this Because we have two vehicles which on paper have obvious differences in both power and speed, however both companies have priced their products accordingly- placing a fair value on what you’re getting for your money, hence the identical bang for your buck (BfYB) values. If you want more power, then you’ll have to pay for it. And if you don’t need all that grunt, then you’ll pay 10 grand less for it. Both vehicles just as worthy and value for money as each other- according to our formula.
But now let’s try a better example, in proving the worthiness of our formula.
What’s more ‘Bang for your buck’? A proper M vehicle? Or is an M-light sufficient?
BMW M2 Competition ($109,900 / 302Kw) / 550nm) x 4.2Secs 0-100Km Time = 2.8
BMW M240i ($81,900
/ 250Kw) / 500) x 4.6Secs 0-100Km Time = 3.0
So according to our formula, although the proper M vehicle is more than $25K more expensive than the M-light, it is still the more Bang for your buck vehicle with a lower BfYB value of 2.8, as aposed to a BfYB value of 3.0. So if you were honestly tossing up between the two, go with the M2 Comp! Push back the purchase of the new vehicle for 6-12 months, use that time to save up the extra cash, and then go all out on the more expensive but more value for money vehicle! And this is another reasoning why we believe Motor manufacturer’s are aware of this formula, as in the majority of cases the top tier vehicle in a range, is almost always the more bang for your buck vehicle in their sporty line-up. It makes sense right? They want you to pay more, so they need to give you more! This holds true when comparing Audi RS and Audi S, Merc’s AMG63 and AMG43, Porsche’s Carrera and Carrera S, and the raging Camaro ZL1 with the Camaro SS- the $162K ZL1 is still more bang for your buck than the 50% cheaper Camaro SS, which also makes the ZL1 the most Bang for your buck vehicle on offer atm, with a BfYB value of 1.4.
We looked at a total of 140 Performance vehicles released in 2019-2020, and our findings have been interesting to say the least.
We learnt that, although heaps of people purchase a Mazda MX5 for its economic fun factor, however from a Bang for your buck point of view, it is actually the second least Bang for your buck vehicle- with an embarrassingly high total of 10.3. Ouch!
While the most bang for your buck exotic vehicle on sale, is the Mercedes Benz AMG GT- at a very impressive 2.7, for a vehicle which is north of $350K!
While these days everyone wants a SUV, so if you still want some Performance with your utility vehicle, then the most bang for your buck SUV is the Jeep Grand Cherokee SRT Core at a Value++ 2.1.
And the most Bang for your buck Performance vehicle under $45K, is the Ford Focus ST with a respectable BfYB value of 3.0.
Of course, when considering a Performance vehicle it’s not all about the power, and it’s not all about how much you’ll be paying for it. But it’s also about how a vehicle handles, how it looks & feels, and how desirable a vehicle is- all of these factors playing a part in your decision making process. However if you just want another metric to help you decide, then test out the Bang for your buck formula! A vehicle’s price, kilowatts, torque and 0-100Km times can all be found from Redbook.com.au You never know, this simple equation may just help you make a difficult decision……Um, easier? Or perhaps talk you off the ledge from making an unwise financial decision. For example, after using the equation, I’ll never consider purchasing a Porsche ever again! No matter how it might make me ‘feel’ when seated inside of it.
If you find this formula helpful, please leave us a comment? We’d appreciate that.
What makes the Bang for your buck value needle move by 0.1? This occurs when the price of a vehicle increases or decreases by $5K; when a vehicle’s power increases or decreases by 10 Kilowatts; when a vehicle’s torque increases or decreases by 25nm; or when a vehicle’s 0-100Km sprint time increases or decreases by 0.1 Sec.
And obviously the Bang for your buck equation will be blown out of the water if you’re purchasing second hand or ex-demonstrator, and/or if you take into consideration a vehicle’s potential for an after-market ECU tune.