2009 Chevrolet Aveo: Driving Canada's cheapest car

When my mom went shopping for a new car a few years ago, she had her heart set on the Chevrolet Aveo. It was advertised at just under $14,000, so she was optimistic she could bargain the salesperson to about that price after all taxes and mystery charges.

But with air conditioning and the air-conditioning tax, an automatic transmission, delivery and "dealer's administration," the price of the cheque she'd have to write quickly ballooned to around $20,000. That was an eye-opener. She bought a second-hand Chevy Cavalier instead.

These days, the Aveo is a little more refined, slightly revised and cleaned up. It can also be a lot cheaper. If you pay cash, and if somebody at your home already owns a GM vehicle (so that you qualify for an additional $1,000 discount), the most basic Aveo5 LS hatchback can be bought for an advertised $8,995, which makes it (with the Pontiac G3 Wave) the cheapest new car in Canada.

After $1,325 for delivery and an "administration" fee of about $300, then taxes on everything, it will cost just under $12,000 to drive it away.

And how does it drive? After 600 km, the verdict: not like a cheap car, that's for sure. GM will be wincing to read the word "cheap," preferring "inexpensive," and that's probably the more accurate term. The Aveo is no flimsy Tata Nano, which lacks a radio and even a second windscreen wiper, but an exceptionally well finished compact car.

It's built at GM's assembly plant in South Korea, the state-of-the-art former Daewoo factory. There's room inside for four – even five, at a pinch – and it's not uncomfortable to drive from A to B. Its interior is excellent, with tight gaps and a quiet ride from the well-sealed doors.

It won't be too quiet in the summertime, though, if you opt for the budget model, like our test car, that forsakes air conditioning. The windows will stay open to provide an attempt at cooling, so you'll have to shout into your hands-free phone and turn up the radio volume. It's quite a good radio, too, with an auxiliary jack for an iPod and even a second power point to keep everything charged.

The actual drive is fine. Nothing more, nothing less. It's powered by a 1.6 L four-cylinder that doesn't drink too much gas; a tankful at 500 km cost me $38 with gas at just under a buck a litre, which equates to 7.8 L/100 km. The official rating is 7.9 L/100 km in the city (35.8 m.p.g.) and 5.7 L /100 km on the highway (49.6 m.p.g.).

A little arrow even shows next to the speedometer to tell you when to shift up to the next gear, though I ignored it most of the time. It just flashed at around 2000 r.p.m., which I could read perfectly well from the tachometer alongside.

The little engine doesn't strain too much at 120 km/h, though the car's soft suspension means you won't want to travel too fast into corners. The cheap-end Hyundai Accent offers a stiffer, sportier ride, and its most basic two-door hatchback still sells for $9,995 – now available with financing.

But these qualities are probably the least of any prospective purchaser's concerns. When it's this cheap, is it worth the money?

Chevy salespeople freely admit that a car this basic isn't for everyone, and the sticker price of the little LS model acts as a great attention grabber. Some 40 per cent of all Aveo5 purchasers end up paying the extra $1,150 for an automatic transmission, while half the buyers just upgrade to the LT model for an extra $2,600 over the base price, which comes with air, power windows and door locks, heated mirrors, cruise control, OnStar communication system and even a sunroof.

Those are probably the buyers with children, who appreciate the easy central locking ("Don't forget to lock the door back there! Did anyone unlock the trunk?") and the power windows ("Leave that window alone!"; "But we're boiling back here!").

Less than 10 per cent buy the completely stripped down, miserly model.

The details of the deal are not obvious. A salesperson took me through all the figures the other day. A base price of $13,770, if not paying cash, then a "cash purchase price discount" to get it down to a Hyundai- and Kia-matching $9,995. Then comes the magic incentive: take off another $1,000 as a "loyalty bonus" if somebody in your household owns a GM vehicle (with proof, though Saabs don't count).

GM offers cash discounts and loyalty bonuses on every one of its vehicles at the moment. If you need financing, like the majority of buyers, the price goes up. The "loaded" LT that my mom had been looking at, for example, once an automatic transmission is added, goes back up to an on-the-road price of $20,700.

The figure I found really interesting was the $1,500 difference between the dealership's cost and the customer's cost, which I'm not sure he'd meant to show me. That's the profit to the dealer, which pays for the salaries, the real estate and all the overhead costs.

Is that the negotiating wiggle room, I asked? It seemed a lot for a $9,000 vehicle. No, he said, although it did give some space for maybe negotiating a better deal on the extras. But it's clear that GM isn't making a lot of money on the Aveo5 – not at this price.

These days, though, GM's not trying to make a lot of money on its vehicles. It's just trying to sell them, to keep its loyal customers, find new ones and – maybe most important – bring back old ones who fell by the wayside of shoddy products over the years.

The Aveo5 will help do this. It's not exciting, but if that's what you want and you just want to get from A to B, and you can pay cash, you'll have money left over for bungee-jumping and swimming with dolphins.

And what's wrong with that?

Mark Richardson is the editor of Wheels. He can be reached at mrichardson@thestar.ca
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