Car Buying Tips: The Truth About Factory-Fitted Satellite Navigation Systems

It’s hard to believe global positioning satellite (GPS) technology was once the sole purview of the U.S. military. It’s equally difficult to comprehend how James Bond’s first in-car tracking device thrilled pre-pubescent boys. These days, a luxury car without a satellite navigation system is like a luxury car without dual-zone climate control. Still, it’s a pretty pricey item that’s bound to bite you in ass at trade-in. So should you listen to your oleaginous salesman and tick that option box?

The tech market is a fickle mistress. That way cool RAZR phone that cost $500 and a two-year contract is now as precious as a Pet Rock at a garage sale. Ask any hapless fool that made a high-end high tech purchase a couple of weeks before a product refresh hit the market— they know the pain of instant 60 percent depreciation (worse than buying a new Chevy).

Product cycles for factory-fitted satellite navigation units aren’t quite that rapid, but they ain’t slow neither. Sat nav units' display screens and memory– the highest cost parts– are getting cheaper and better, fast. At the same time, operating systems have moved from CD to DVD to memory chip, while the user interface has progressed from 2D to semi-3D, heading towards “street view” and God knows what else.

If you think that’s been a quick change, handheld sat nav units are evolving twice as quickly. It takes carmakers time to spec, design, test, manufacture, fit, ship and sell new devices– never mind clearing the whole schmeer with legal. Portable GPS manufacturers have fewer technical hurdles and a MUCH smaller bureaucracy. In fact, products from companies like Garmin, Michelin, Maxtech and TomTom (not to mention phone and PDA-based sat navery) are making brand new in-car systems obsolete before they’re even launched.

Thanks to the Original Equipment Manufacturers'' (OEMs') slow tech turnaround, by the time a customer comes to sell a car equipped with a factory-fitted sat nav system, the clever route guidance gizmo is not worth the silicon it’s printed on. Or, if you prefer, somewhere around $500.

That’s the average used car sat nav premium, and that’s not good. Not when you consider that an average built-in sat nav package costs the new car buyer a whopping $2k+ (not including tax). Of course, that’s the manufacturer’s suggested retail price (MSRP); the invoice cost is about $400 to $500 less.

That's a decent chunk of change for a hard-pressed salesman or car dealer. Working our way back up the food chain, the in-car sat nav system costs automakers at most a sixth of its MSRP, even with all the frills. So it’s no surprise that carmakers, dealers and salesmen are all pushing built-in sat nav systems on the consumer.

Now that portable sat nav units are making a financial mockery of their car-bound cousins, and even wealthy new car buyers are shunning built-in GPS units as a money-losing proposition, the car cartels are fighting back in the great tradition of “keep screwing the customer as long as you can.” It’s called bundling.

Fancy a Mark Levinson 14-speaker 330-watt Premium Surround Sound Audio System in your Lexus GS430? Excellent choice! But you can’t have it without satellite navigation, and forking out $4230. Want a rear back-up camera and park distance control radar in your BMW X5? That’ll be the $2600 “Technology Package,” with DVD-based, voice-activated, real-time traffic computing satellite navigation.

There’s a flip side as well. If you JUST want sat nav, plenty of automakers force you to purchase a passel of luxury options before you’re allowed to buy it. The Chevrolet Corvette only offers sat nav on the $5k 3LT trim level, which includes a fancier standard sound system, head-up display, memory package, heated seats, power telescoping steering wheel and universal home transmitter [whew].

While not as reprehensible as safety option bundling bullying, this sort of “take it or leave what you really want” sat knavery will only continue for so long, as the value of factory-fitted systems continues to plummet and customers get stiffed at trade-in time.

The practice also faces pressure from the declining cost of sat nav systems, which will make them available in a wide range of mass market motors, which will eliminate sat nav’s “premium” patina. Toyota recently announced it will offer “entry-level” sat nav in some of its models, with a lower resolution screen, without voice activation.

It’s only a matter of time before factory-fitted satellite navigation will eventually go the way of the FM radio and CD player; it’ll be a low-cost standard feature. Manufacturers are already searching for The Next Big Thing: a new “must have” luxury that commands the same premium. Meanwhile, unless you’re a neat freak who doesn’t like anything stuck to the windshield, leave that sat nav option box unchecked and buy a portable unit.