(MONEY Magazine) – Q. My husband and I want a vehicle that has three rows of seats, that's at least somewhat fuel efficient and that holds its value. One problem: My husband hates minivans. We're open to either new or used. What do you suggest?
A. First, have your husband seek help for his insecurity about the minivan, still the most efficient of family haulers. But if Dr. Freud can't hypnotize him into buying a Honda Odyssey (or a Toyota Sienna), try this bait and switch: the Honda Pilot or its upscale sibling, the Acura MDX. Both are based on the Odyssey platform and share its sterling features—power, comfort, solid handling, impeccable quality and top resale value. You will lose a minivan's sliding doors, but you add all-wheel drive, unavailable on the Odyssey, giving you more traction in rain or snow. New or used, they're worthy buys. The MDX is pricier, starting at $36,970, but it's also more powerful and luxurious than the utilitarian Pilot at $27,615. Either one is a perfect compromise. They look like SUVs but are essentially minivans under the skin, allowing your husband to preserve his manhood, and you the marriage.
Q. My stepmother has a convertible Mercedes with a nifty cup holder that pops out right above the radio/CD player. It looks cool, but condensation dripped from the cups and broke the radio. Is this a design flaw? Whose fault is it that the radio doesn't work?
A. It's Mercedes' fault for designing a poor cup holder. It's your stepmother's fault for assuming a German company would have a clue how to make one. Our Teutonic friends—so gifted with most auto engineering—discovered the cup holder at roughly the same time they figured out that a CD player doesn't belong in the trunk. German automakers once dismissed cup holders as an American fad that detracted from the sober business of driving. When forced to play along, they decided that a simple plastic hole wouldn't suffice. Thus German cup holders are complex marvels of engineering. They just can't keep a scalding cup of java out of your lap. The dash-mounted version is a prime offender. It frees up console space, but hit a pothole and your dashboard becomes a Jackson Pollock drip painting. Explain that flaw to a Mercedes engineer, and he'll insist the cup holder is perfect; it's your cup that's the problem.
Q. Is it true my new car loses 30% of its value in the first year?
A. I hope you're sitting down in that shiny new car. According to data from Automotive Lease Guide, the average car or truck loses a dispiriting 38% of its sticker price in one year, which certainly blows my theory that cars make great investments. But unless you trade cars faster than a hip-hop mogul does, more telling is the residual value after three or five years. That's when people begin pining for new wheels—and going ballistic when they discover their trade-in won't cover a '74 Gremlin. Over three years, the average '04 model is projected to slide to 44% of its retail price, meaning that today's $25,000 car will fetch $11,000 wholesale from a dealer in 2007. (The good news is that the figures—available at Edmunds.com—are based on sticker prices, so they don't account for today's hefty rebates.)
What this data vividly illustrates is which brands people believe in. Luxury names rank higher: 2004 BMWs are projected to hold 55% of their value after three years, followed by Lexus (53%), Acura and Mercedes (52%). Cadillac (46%), Land Rover (44%) and Lincoln (40%) trail the luxury pack. For nonluxury cars, only Honda (54%), Toyota (53%), Volkswagen (52%) and Nissan (50%) retain at least half of their value after three years. The barrel's bottom holds stodgy Buick (36%), budget Kia (35%), barely-breathing Isuzu (33%) and flatlined Oldsmobile (32%).
American cars remain dogged by an overreliance on rebates and a perception of lagging quality. Key quality measures show American cars actually topping most Europeans and closing the gap with the best Japanese brands. But until the market sees it that way, buyers hoping to stem the erosion of their auto dollar will look overseas first.