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MDX vs 2002 ML320

3761 Views 19 Replies 14 Participants Last post by  WCTB
The other thread is out of control so I figured I would start a new one. Here goes:

I have been a fan of the MDX for the past year and a half and had all intentions of purchasing one but with the low production volume and dealers that are unwilling to negotiate off of MSRP I decided to look around. I’m glad I did. I just ordered a new 2002 ML320. I went with the MB because it was such a nice vehicle. It has numerous changes this year such as 5 spoke 17” wheels with Dunlop 5000 series tires and an upgraded interior and exterior. I thought the interior on the MB was much nicer then the MDX, the wood, steering wheel, dash layout, and especially the switch gear. The chrome window switches on the MDX look very cheap compared to the MB. I liked the sporttronic transmission in the MB. The vehicle had a “sports car” feel to it that made for a great driving experience. On top of all that I worked with an aggressive dealer who discounted the $39K ML320 to $36K. I feel a lot better paying $36K for a $39K vehicle then $35K for a $35K vehicle. In addition, USAA (my insurance company) only wants $40 per year more for the ML320 over my current 98 Jeep. The MDX would have been $260 more. I think the MDX is a great vehicle but with it being stuck at $35K MSRP I think the MB is a steal at only $1500 more. That’s why I bought one.
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jeff968 said:
I feel a lot better paying $36K for a $39K vehicle then $35K for a $35K vehicle.
Your points are well taken. I think many here came up with different priorities and therefore a different choice.

But it seems to be an oddity of human psychology that one feels better about paying more for a vehicle simply because of an arbitrary sticker price!! I cannot blame you - I think many or most people have this feeling but rationally it does not make sense. I guess we all assume that a $39K sticker means the car is worth $39K and somehow we get a deal by getting it for less. Maybe this is why you see items on sale at the grocery store "regularly $2.49, on sale for $2.40". In the end, hardly a big discount but it makes us feel better about the purchase. Anyway, enjoy the ML.
It all starts with MSRP.

A2MDXer, the thing about MSRP is that some people pay it and some people don't yet all of the vehicles depreciate the same amount and have the same value as time goes by. Case in point, now that my ML320 is ordered I'm selling my 1998 Jeep Cherokee. The MSRP for my Jeep in 1998 was $22,500. I paid $20,000 for it. Today, a Jeep with my options and mileage is worth $11K. Now, I'm sure someone paid MSRP for a Jeep just like mine 4 years ago and thinking that it is in the same condition that mine is they have lost $11,500 in depreciation compared to my $9K. I feel better losing only $9K. The fact that some people do pay MSRP for vehicles provides a starting point for depreciation which we all experience. It just that if you are under MSRP then you won't lose as much. Now, as for the MDX, it is just a matter of time before supply catches up with demand. The thing about the MDX is that there is a large margin between what the dealer invoice and the MSRP so they can give a good discount and still make a good profit. This will eventually happen. Let's say the MDX goes up $300 (like it did from 01 to 02) for model years 03 and 04 giving it a MSRP of $35,700 in 2004. The invoice should still be at around $31,700. If the MDX supply has caught up to demand (like you see on most of the other Acura models) then we can predict 2004 MDXs selling at $32K-$33K. How's the value of a 2002 that someone paid the $35.1MSRP going to hold out? It will drop big time and they'll take a BIG hit on depreciation. We see this all the time. People were paying $60K plus for Plymouth Prowlers back in 1998. Now you can buy better Prowlers for under the $39K MSRP. What do you think the value of a 97 Prowler is now? It's better then my Cisco stock but not much. You pay a big premium to be the first on the block.
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Jeff, the comparison should actually be between the depreciated value of the MDX and the depreciated value of the ML (not whether you, or anyone else, paid full MSRP). The value of either automobile after 4 years is based on the true market value (or a reasonable facsimile of one) REGARDLESS of what the original sticker was (i.e. it is certainly possible that after four years BOTH the ML320 ($36k paid) and the MDX ($35k paid) will have a resale value of say $22K). In which case you paid $1k too much, respective to the MDX.

FWIW, the depreciation on the ML320 is likely to be even more substantial given that the COMPLETELY redesigned ML (unibody based - like the MDX) is forecast to arrive late next year.

Donsev, It would be pure speculation on either of our parts to predict the value of the MDX or the ML320. However, it is a safer bet to predict that the supply of MDXs will catch up to demand within the next year or two. That being said we can look at the MSRP situation with the MDX alone. Dealers make money even when they sell cars at invoice (holdback, incentives) so when they sell a car at MSRP they are really making out. The MDX has a larger margin between MSRP and invoice then most vehicles. With a $4000 margin Acura dealers are really enjoying the profits that the MDX are bringing them these days. However, once the supply of cars meets demand we can look for MDX prices to drop. It is conceivable (based on last year’s MSRP increase) to predict 2004 MDXs selling for under MSRP at $32,000-$33,000 with the dealers still making a good profit. If this turns out to be true what will it do to a 2002 model which sold for $35,100 MSRP? The 2004 model will have two more years of improvements and it will be selling for $2000-$3000 less. This will send the value of the early vehicles falling just as we saw in the Prowler example that I cited above. For that reason make sure you purchase an early MDX at MSRP for the long run as it will probably hit you hard if you sell it in just a couple of years after the demand has been met. As for the new M-class, I'm sure it will command a MSRP+ situation for at least a year after it shows up just like the new G-class is getting now.
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Here is what I have to say about any threads on the MDX vs. ML


Whatever..give it up..its fruitless...thanks to that Lester the MDX molester...

Shall we digress?
I agree with Fireblade. There will never be a end to this comparison. But they are fun to read.

I especially though your second second point was right on the money:D

If you are just looking for affirmation that you made the right decision on the ML320 then I will gladly stop posting :) ...

If on the other hand you still have time to re-consider your ML order then lets look at the information a little more closely.

First, IMHO the comparison to the Prowler (or the G-wagon) is more than a little off the mark - those are low volume niche vehicles whose TMV (to borrow the Edmunds True Market Value term) on initial product release are greatly distorted by the price-inelasticity shown by the early adopters who *must have* the latest hot thing. In addition, in the Prowler example (as well as the S2000, the PT Cruiser, the new T-Bird etc.,etc.) the price was driven to well ABOVE MSRP, leaving substantial room for the TMV to crash once the early adopter demand was sated. While there are exceptions, the MDX consistently sells AT MSRP (yes, there are some dealers that are charging for forced options but at least they are providing product for the additional $ - in addition, by broadening your search, you can usually find a dealer that WILL sell at MSRP flat).

Second, the TMV is driven by more than the Supply/Demand curve, it is also (as indicated above) driven by the value the consumer finds in the utility derived from the purchase. IF the consumer is satisfied that the product is providing that value at a given price point, OR there are few economic substitutes, then the consumer will continue to pay at or near that price as supply increases. To provide a comparison, when the ML320 was initially released in 1997 there were few substitutes (midsize luxury SUV) and demand was constrained - leading to premium pricing and long wait times - which eventually evaporated. Contrast that with the introduction of the MDX into a much more crowded midsize luxury SUV field (many substitutes) and well into its second year it is still commanding wait times and firm pricing. We are well past the early adopter phase so the TMV must also reflect the value seen from the utility derived (at the purchase price).

Pehaps the best example/comparison would be the Honda Odyssey. After several production volume increases, the TMV of the Odyssey IS STILL OVER MSRP AFTER 3 YEARS. This is true across the range from the EX w/leather & Entertainment (Invoice-$27,204, MSRP-$30,190, TMV-$31,590) to the LX (Invoice-$22,262, MSRP-$24,690, TMV-$26,090). "How can this be?" you say. Because the consumer perceives tremendous value at the MSRP.

Third, I think there is some confusion as to the increase in the production levels of the MDX caused by bringing on-line the Alabama plant. According to the most recent information I have, the allocation of the 170k unit capacity at Alliston is slotted for 90k Honda Pilot, 50k MDX, and 30k Odyssey (currently 130k Odyssey and 40k MDX). The Alabama plant production is scheduled at 120k Odyssey to be expanded to 150k. And yes I believe that Honda believes that they will sell every one of those 150k Odysseys at or near MSRP.

Could the bottom fall out of the SUV market taking TMVs and resale values with them? Sure. Could the 2003 Volvo XC90 or 2004 Lexus RX300 (or the Pilot for that matter) cannibalize the demand for the MDX by providing a viable substitute? Sure. Will the 2004 ML command MSRP+? Ummmm (that depends entirely on where the price is set relative to the value it offers). Will that prop up the resale value of the 1998 - 2002+ MLs? UMMMM (let's not ask the owners of 1991-2001 Ford Explorers how their resale values are holding up after the release of the "Totally Redesigned" 2002 Explorer ;) )
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TMV? not for me...


As to your comments, IMHO the Prowler and the other vehicles ARE right on the mark in the fact that there exists a greater demand then there is a supply hence the higher selling price. Recall, that it was only in the last few months that MDX prices have fallen to MSRP. There were many early adopters who paid well over MSRP for an MDX last year.

TMV is purely a subjective value assigned by a bunch of people who run a web site. Since when is THE source for real world pricing? I checked the ML320 I just purchased there and it gave me a TMV price which is $1200 MORE then what I paid. So much for those great minds behind TMV. No wonder your Odyssey number don’t make since. I think you are giving these guys way too much credit. If you want to see true market value, watch one of the MDX speculators put one up on eBay. They never sell and that’s the real world. Another think to keep in mind, if there is one thing we can count on from Honda, they have the redesigned MDX already in the works. That happens to all of us.

The bottom line, neither you nor I know what’s going to happen (and sure doesn’t know) over the next four years. We’ll just have to wait and see. I just know that for me, the MSRP was an issue and one of many factors that made me decide against the MDX and for the ML320. I’m happy with my decision and I hope you’re happy with yours. Best of luck.
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HI.. just a few Q's to ask..

1. With 36k what kinda stuff do you get in your ML320?(leather? CD?)
2. Does the 02' ML 320 comes with 3 row to make it 7seater? or is that extra?
3. How many hp is ML 320? and how is the MPG?
4. If you don't mind could you let us know the "out of the door" price of your ML
and also what options you got?

I take it your answer was number one.

jeff968 said:
IMHO the Prowler and the other vehicles ARE right on the mark
OK, you stick to your comparison that the market factors that affect the MDX (or ML) are more closely aligned to eclectic 2 seat roadsters and I'll stick with my comparison to a 7 passenger utility vehicle (Odyssey).

Recall, that it was only in the last few months that MDX prices have fallen to MSRP.
Shhh, don't tell that to the three dealers in my metro area who have been selling AT MSRP since day one with no forced options. (Our purchase: one year ago at MSRP with some goodies thrown in)

TMV is purely a subjective value assigned by a bunch of people who run a web site.
Well, you could question it's veracity, but you certainly couldn't call it subjective .'s staff of statisticians, researchers, programmers and pricing managers spent almost a year developing TMV pricing for new vehicles and the TMV New Vehicle Pricing Calculator. The process takes into account a number of factors, including the vehicle's invoice price, manufacturer's suggested retail price, and current supply and demand for that vehicle. We then utilize a complex proprietary formula for estimating the TMV for all vehicles currently being offered by dealers. These values are regularly checked against "real world" data, and adjusted for factory-to-dealer incentives.
I checked the ML320 I just purchased there and it gave me a TMV price which is $1200 MORE then what I paid.

(Oh, you DO question it's accuracy) Don't you see that is precisely the point. Any statistical average will have a variance around the mean. You were able to find a value below the mean for the ML with (presumably) little effort. You will also be able to find values below the mean for the MDX (but with perhaps more work - they have a tighter grouping around the average)

No wonder your Odyssey number don’t make since.
Well, actually they are right on the mark. I could post links to news articles about the long waits and MSRP+ but perhaps you will believe it from the buyers mouths ODYCLUB

If you want to see true market value, watch one of the MDX speculators put one up on eBay. They never sell and that’s the real world.
eBay, the real world - don't think I've ever heard that one before. First, the majority of auctions on eBay for the MDX are for
positions on a dealer waiting list (which is dubious at the very least). Second, since only 4% of all auto purchases are done on-line, at LEGITIMATE auto sites, I don't think it taxes the imagination to think that folks are reluctant to plunk down $35k on an eBay auction for a car. Third, again it proves the point that the demand for the MDX is driven by rational expectations of its value, NOT by speculators (but perhaps you could sell that Prowler on eBay ;) )

Jeff, I do not mean to denigrate your decison. I post in the sincere hope that down the road you do not find your decision to have been "penney wise, and pound foolish".

To you as well, best of luck.
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Donsev, I'd just like to say that you have posted some of the most rational, factual, and intelligent thoughts I've seen on any car board. Thank you! :)
There are at least 50 SUV's on the market now ranging from $20-70K. The mainstream ($25-30K) is so over populated that manufacturers are niching themselves (and us) to death trying to stand out in the buyers mind. Does the world need 50 different types of SUV's? No. But there are obviously enough buyers whose hot buttons are being hit by all these different choices that the manufacturers keep making them and will keep making more. In the $40K segment I looked at the MDX, X5, and ML. My decision to get an MDX doesn't invalidate someone else’s choice of the BMW or M-B. Why can't we all just get along? :)
re: supply and demand

I own two TL's, a Satin Silver '99 and a Taffeta White '01, and yes, I paid more for my '99 than my '01. When the '99's first came out, there was at least a six week waiting period, if not longer in some areas, so yes I paid MSRP. When I bought my '01, there were 15 on the lot. We had our pick of the litter and the dealership was easily willing to negotiate. Do I feel bad about this and the potential loss in value down the road? No, because I didn't have a choice at the time, unless I wanted to wait a year or two for supply to catchup with demand, and that was NOT an option. And that is about all you can do if you're worried about depreciation. Wait. Wait for supply to catch up with demand. I'm not the type to wait. It's hard enough waiting until April for my Taffeta White '02 Touring MDX to be delivered.

There is a reason there is a waiting list for select Honda's and Acura's. They make a high-quality product at a reasonable price. I find that almost every one of the competitors for an Acura is always priced higher. Look at the MDX's competitors. The X5, the RX300, the ML320, and so on. And every one of them costs more for basically the same features.

It is the same way with the TL. The Lexus ES300, the Lincoln LS, the Volvo, the Chrysler 300M, and so on, all cost more than the TL, but do not have any more features, or any more power under the hood. I'll stick with my high-quality, reasonably priced Acura. They can have the rest.
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jeff968 said:
The other thread is out of control so I figured I would start a new one. Here goes:

The chrome window switches on the MDX look very cheap compared to the MB.
have you seen your MB's rear wiper blade?
Supply & Demand

After 3+ years, the supply of Odyssey has not caught up with demand, at least in the Chicago area. I'm not too optimistic with the MDX.

With the ability to switch among MDX, Odyssey and Pilot in the 'flex' factory, Honda has a lot of control over the supply end of the equation.
New plant opening in Alabama

My local dealership told me they are moving production of the Odyssey to Alabama, leaving the MDX to be produced in Canada. They said this would amount to about four additional vehicles a month, on top of the 14 they are now receiving. Not sure how it would effect the Odyssey supply. FWIW
Alabama Plant

That's true that the odyssey will be produced in Alabama, but Honda plans to build the Pilot at the MDX plant in canada. So, MDX productions #'s will not increase significantly. Most predictions are that it will go from 40,000 MDX's/yr to 50,000/yr.
See the 2/4/02 Wall Street Journal

Mercedes Benz has the dubious "honor" of having the quality of their motorcars evaluated in the WSJ and to be found wanting! Or lets put it another way - the quality is not there!!!

Dateline Frankfurt - the articles first paragraph reads as follows:

"Mercedes-Benz, famed for its engineering prowess, is suddenly facing tough questions about the quality of its cars, with several surveys showing that the stately German brand may now trail some decidely down-market competition."

It is a very damaging article to M-B reputation.

PS - The M-Class was the WSJ's choice of an accompanying photo:eek:

Can you answer TYP's questions? I curious to hear what you got for 36k you spent on the ML.
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