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What factors influence the price of a second hand car

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Introduction

What factors influence the price of a second hand car?

There are many factors that will influence the buyer when purchasing a second hand car; age, model, make, colour, style, fuel, mot and condition to name a few.

I think that the age, mileage and engine size of the car will influence the buyer more than any other factor. My reasons are:

  • Age: I think age will be a major factor because older cars are generally not as popular as their newer counter parts, and an older car will probably have more problems than a younger model.
  • Mileage: I think mileage will be a major factor because a high mileage means a car has been driven a lot making the engine less efficient and may mean the car will be high maintenance.
  • Engine size: I think the larger the engine size the higher the price of the second hand car because a big engine size means the car will go faster which is quite important to most people.

To find out whether my hypotheses are correct I will need to collect some data. I have been provided with a data base of 100 cars. I will not use all 100 cars as this is too much data for me to work with.

...read more.

Middle

13610

4999

4

33000

63.27

Mitsubishi

14875

5999

2

24000

59.67

Rover

22980

6999

4

30000

69.54

Renault

13175

6999

3

41000

46.88

Vauxhall

13510

7499

4

27000

44.49

Fiat

10351

3495

5

51000

66.24

Vauxhall

18140

6499

4

49000

64.17

BMW

28210

5995

8

55000

78.75

Vauxhall

8900

4995

2

24000

43.88

Fiat

8601

3995

4

31000

53.55

Rover

21586

3795

5

51000

82.42

Mitsubishi

15800

5999

2

33000

62.03

Fiat

6009

1995

6

20000

66.80

Rover

13586

3795

6

49000

72.07

Nissan

6295

1795

8

47000

71.49

Daewoo

11225

5999

3

42000

46.56

Rover

8595

2495

6

33000

70.97

Ford

8785

1595

7

68000

81.84

Fiat

6864

1495

8

51000

78.22

Rover

6645

895

7

43000

86.53

Vauxhall

5599

1000

10

75000

82.14

Toyota

13800

7495

2

25000

45.69

Vauxhall

10150

850

10

73000

91.63

Volkswagen

9524

3695

7

49000

61.20

...read more.

Conclusion

[You should try and explain why you think these may be, and also why has the equation of the line of best fit been put in? describe how this can be used].

        The scatter diagram also shows me that the depreciation varies a lot for an age, e.g. for a car 6 years old there are about 8 different % depreciation values and the same % depreciation value holds for cars 3,4,5,6 and 7 years old. So I do not think the scatter diagram is the best way to find out if age truly affects the depreciation of a car. I will instead work out the average percentage depreciation rate for different ages and see if there is a trend in this.

        I have made a table of the results, and to work out the averages I took 2 cars for each age (1 – 10 years) as I had the data for this in my 50 cars:

age

% depreciation

average % depreciation

1

50.01

1

23.75

36.88

2

43.88

2

45.69

44.79

3

46.56

3

53.86

50.21

4

63.27

4

69.54

66.41

5

66.24

5

82.42

74.33

6

72.07

6

70.97

71.52

7

81.84

7

86.53

84.19

8

71.49

8

78.22

74.86

9

79.81

9

70.13

74.97

10

82.14

10

91.63

86.89

The results clearly show that the trend is an upward one, that is, as the age increases the % depreciation generally increases. I have also shown this on the graph below:

image03.png

        I have so far only considered the age of the car irrespective of the make

...read more.

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