According to the USA Today, built in navigation systems increase the depreciation of cars and trucks. These new findings are forcing automakers to rethink the $2,000 in dash systems that they currently offer.
"Navigation could be like cellphones built into cars in the '70s and '80s; those big, blocky phones that nobody has now. Everybody has a small, personal cellphone," says John Krafcik, vice president for product development at Hyundai Motor America.
The future of navigation systems may be the smaller, less expensive portable units that you can find at your local Circuit City or Best Buy. These portable systems can do most of the same functions as the in dash systems, but they are portable. Since they are portable they can be used in several vehicles, when you travel, etc. The current in dash systems are limited to the vehicle they are installed in.
Since built in or in dash navigation systems can decrease the value of a vehicle automakers are thinking of ways to offer the portable units to their buyers. (The new Land Rover LR2 will hold 55% of its value after 3 years, the LR2 with navigation is only going to be worth 52%). According to USA Today a unit that costs $2,000 when the car is new will only add about $600 to the value of a car after three years.
The main reasons for the increased depreciation are that used car buyers are always looking for a bargain, not necessarily technology. Also technology is always changing, so a three-year old navigation system will most likely be obsolete.
There are some negatives to the portable units such as: theft, they have to be mounted on the windshield or dash and the extra wires can be a hazard.
Full Story: USA Today
Comments (3)
As Navigation becomes just another function of the in car computer and is more integrated into the driving experience this whole discussion about depreciation will be moot.
Navigation as a function belongs with the mode of transportation.
A in car phone is not the same thing. People don't get into a car to talk on the phone. They do get into a car to travel somewhere navigation is a part of that.
How much does USA Today really think depreciation is going to affect someones decision when they're buying a LR2. If they were worried about depreciation they'd buy a g35 which only depreciates about 20% after 5 years.
Posted by mf | May 10, 2007 9:33 PM
Posted on May 10, 2007 21:33
Navigation systems are great, they belong in every car. You may not want to pay two grand for one but at the right price they are a great addition to any car. I have the Acura system and its real nice to have when your going someplace you have not been before.
Navigation systems cost about the same as a stereo or palm type computer to make, They are a high profit item. The prices will drop as they become more common.
A handheld Garmin 396 GPS sold for $3000 six months ago when it was the top of the line. Now the 396 sells for $2195 because there is now a 496 with a few extra features. You can buy a GPS that plugs into a laptop computer or palm type for less than 100 dollars. The most basic hand held GPS units are about 100 dollars.
These are great products but they probably cost less than 100 dollars to manufacture. Anybody who has lusted after the fastest coolest gotta have computer chip on the market for $1000 will learn a quick lesson in marketing when they see it selling for 15 bucks a few years later.
Posted by Larry | May 31, 2007 12:29 AM
Posted on May 31, 2007 00:29
Nav systems are hardly necessary and definitely don't belong in every car. I can see how as people become more and more reliant on technology that people would go ahead and say that while its automotive functions are arguably still in their infancy, but depreciation IS a serious considerationw hen buying a car, not whether it can tell me to go right or left. Personally, as a driving enthusiast, I enjoy knowing where I'm going based on experience or learning how to get to where I'm going, not havnig TomTom the idiot tell me. I don't need the answers on my test either.
Posted by nelson | January 28, 2008 2:42 PM
Posted on January 28, 2008 14:42