Imagine the situation: you have noticed the car of your dreams in an advertisement – in the right dimensions, in a pleasant color, with a powerful engine, high-quality and rich finishing, and at a price that does not bite. You go to the car dealership to order it, but it turns out that the intended vehicle is much, much more expensive. Why is it?
The best version – at least a third more expensive
Yes, of course, you already know that the price shown in advertisements is often for the base model with the weakest engine and the very minimum equipment. By conducting a simple market research, it can be discovered that the price increase starts from two to three thousand and increases up to 30 percent of the base price, in the worst case it reaches almost half.
“Prices are determined according to each manufacturer’s policy and also strategic goals. For example, you can add all possible extra equipment to a South Korean car and it will not have a seismic impact on the final figure. But another manufacturer’s model will be completely bare, and most of the everyday comfort items will have to be to buy. The third one will offer several levels of equipment, according to which additional things are divided accordingly. It can be said that there are three marketing directions in the market and manufacturers play with them according to their vision,” says Agris Dulevičs, head of AutoDNA, Latvia’s leading car history checking service.
Automakers take different paths
Two pricing approaches are most commonly used. The first provides several levels of equipment. It is typical of Japanese and South Korean companies, and Renault is also gradually moving towards it. This means – as many equipment levels, as many lines in the price list. The cheapest version has the most modest equipment, the slightly more expensive one has a lot of the most popular equipment, and then there is the best-equipped, most expensive and luxurious version. Such a price list is quite easy to navigate.
Europeans, mostly Germans, practice a slightly different policy: they indicate the price of the most deprived version, and all comfort attributes must be bought additionally. There is also a third approach: the car is sold with maximum equipment, leaving only a panoramic glass roof or larger wheel rims to choose from. However, this is specific to individual models.
But there are also brands that successfully combine all the mentioned approaches, such as Mazda. Its CX-60 model offers several trim levels, with a primary focus on individualization and design customization. This Japanese manufacturer puts most comfort elements as standard in all versions, including heated seats and steering wheel, cruise control, navigation, smartphone connectivity, rearview camera, automatic high beams and windshield wipers, as well as other everyday conveniences. The packages, on the other hand, offer features that buyers choose less often, such as an extra powerful audio system, seat ventilation and driver recognition. Trim levels differ primarily in design details, seat upholstery and other interior trim. For example, Exclusive-Line is more modest, Homura is more luxurious, and Takumi finishes with the finest materials demonstrate the craftsmanship of Japanese craftsmen.
The prices are similar, but not comparable
“Prices are also marketing. Some manufacturers draw the base figure in such a way as to lure people into the dealership. After learning the true costs, they either refuse to buy, or cross the psychological border and agree to a completely different level. This especially applies to private individuals,” explains Agris Dulevičs .
Games with a base price are especially popular with German premium brands. People who know anything about Japanese cars sometimes judge that they might be in the same category, but a closer look reveals a completely different picture.
Let’s say a plug-in hybrid Mazda CX-60 with 327 hp has a base price of 52,990 euros. Adding all three comfort packages, which include ventilated and electrically adjustable seats, additional safety systems and an electrically opening trunk lid, raises the price to 62,000 euros.
For the same amount, you could afford a slightly smaller but equally prestigious Mercedes-Benz GLC with the iconic star on the radiator grille. Its starting price is slightly more than 61,000 euros. However, for this amount, only the base variant is offered, which has a 204 hp petrol engine and basic equipment. Mazda provides all the equipment for this price, while in the case of Mercedes-Benz – to achieve comparable figures – additional options will have to be added.
And German comfort is not cheap. For example, the Premium Plus package, which includes navigation, electrically adjustable heated seats, four-zone climate control, adaptive headlights and a 360-degree camera, costs another 9,600 euros. Package of driving assistance systems – plus almost 3000 euros. Or, for example, you have to pay a little more than 3,000 euros for the adaptive suspension. For a more comfortable adaptive suspension – a little over 3,000 euros. Thus, the price of a model with a base engine can easily exceed the 80 thousand mark.
“The more I buy, the more I approach. All options have their pros and cons. Some put everything in one set, but not everyone needs everything. It should not be the case that you have to buy a horse along with the saddle. Others give free choice, but in the long lists of equipment one can easily get lost, and in the end, when everything is added up, an unpleasant surprise can await,” sums up Agris Dulevičs.
2024-04-07 08:31:23
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