Is Factory GPS Today's 8-Track Tape Player?
By Eric Peters
Some options are worth more than others - at least, when it comes to re-sale value. And you might be surprised to learn which ones raise your car's down-the-road value - vs. those that may not.
For example, factory installed, in-car GPS navigation systems. These are typically big-ticket items on the front end - adding as much as $2,000 to the purchase price of a new car. It would be reasonable to assume that such a big-ticket extra would add to the car's future re-sale/trade-in value. But according to the Automotive Leasing Guide (which publishes data on the residual value of new cars at the end of their leases, etc.) a factory GPS system actually lowers the value of a vehicle so-equipped by about 1 percent. How come?
Because GPS systems - unlike, for example, air conditioning - become dated as the technology improves. Today's miracle gadget might be tomorrow's anachronism - just as CB radios and 8-track stereos became in years past.
For example: Some 2007 cars have GPS with "real time traffic assistance" - a feature that updates your programmed route to avoid gridlocked roads. This is the very latest, "state of the art" in GPS technology.
But a year from now, that may be old hat - or the technology improved to such an extent that the first thing any prospective buyer of a used car fitted with an older/out-of-date system would want to do is have the original system replaced. Which costs money. Which, of course, lowers the value of the car in question.
Some industry analysts predict that the rapid pace of technological advances may actually render factory installed GPS systems obsolete so quickly that the automakers will stop offering them at all. Instead, they'll pre-wire their vehicles and set them up so that the very latest "plug and play" aftermarket systems can be dropped in - and easily replaced with an updated unit as the need arises.
The biggest obstacle to be overcome is figuring out a way to standardize the "slot" or "cubby" that would house these replaceable GPS unit so they look presentable and integrated with the rest of the vehicle. Current aftermarket GPS units may be state of the art, from a technology perspective - but they can look clunky propped up on the dash. For higher-end cars especially, it will be necessary to make the "install" look as nice as the unit actually functions. But this is where things appear to be headed.
Early obsolescence may also come into play when it comes to factory installed stereo rigs - and for the very same reasons. Five years is an epoch in terms of audio capability and features. For example, few three-to-five-year-old vehicles have WMA/MP3 players. But these are increasingly "must have" features on today's new cars - and a used car without a stereo that can play iPod tunes is a car that will need to have its stereo replaced. Or so a prospective buyer will claim (and expect a discount on the purchase price to cover the cost of installing a new rig).
And five years from now, WMA and MP3 players will probably have been supplanted by some newer, better way of making music. And so it goes.
On the other hand, certain features almost always make a car worth more down the road. Air conditioning, for example. Most people expect AC, in fact - and won't even consider a car that doesn't have it. Anti-lock brakes, power windows and locks, electric rear defrost and an automatic transmission also usually boost the potential re-sale value of most cars. You can buy these with some comfort - knowing that they'll almost certainly help you get a bit more for your ride when it's time to replace it with a new one.
But you might want to think twice before ponying up that $2k for GPS - or the extra $800 for that MP3-playing stereo rig. Today's "state-of-the-art" might turn out to be tomorrow's albatross.
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