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Which factors influence the price of a second hand car?

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Introduction

Ricky Winborn

Maths Coursework 2002

Which factors influence the price of a second hand car?

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By Ricky Winborn Collinson 1199

Objective:

The aim of this project is to investigate which factors influence the price of a second hand car. For example, one may investigate to see if mileage, MPG, Price of MOT, make, model, colour, engine size, fuel, service history, number of owners etc. I will now investigate the following factors to see if they affect the difference in price when new and when resold.

Predictions:

First of all, I predict that the age of the car will highly influence the amount of depreciation in value. This is not relevant for all cars as some are considered valuable for being ‘vintage’ and rare. This is probably relevant for cars that are between 30 and 5 years old. I also think that the amount of mileage done will affect the car in most cases.

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Middle

The first factor that I will investigate to see if it affects the price of a second hand car is the age. I expected there to be a correlation so I decided to draw a scatter diagram. This is what I found.

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This graph clearly shows that there is a negative correlation meaning that as the age increases, the price decreases.

The next factor that I will investigate to see if it affects the depreciation (see page 1) is the mileage. I decided to use another scatter diagram to see if there was any correlation between the two factors. This is what I found.

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Again, this graph definitely shows that there is a negative correlation meaning that, generally, when the mileage increases, the price decreases. There are a few exceptions.

The next factor that I am going to investigate to see if it affects the depreciation (see page 1) is the nationality of the car.

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Conclusion

I will now investigate to see how British cars hold their values. The gradient for this line is -5.9.

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I will now investigate to see how American cars hold their value. The gradient for this line is -4.5.

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I will now investigate to see how Asian cars hold their value. The gradient for this line is -5.0.

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From these graphs, it can be seen that that the one with data for British cars has the steepest gradient. This means that from this information, the British cars hold their value the best. It can also be seen that American cars hold their value the least well. From the data provided.

Conclusion:

From my investigation it can be seen that:

  • There is a negative correlation between the age and the depreciation.
  • There is a negative correlation between the mileage and the depreciation.
  • That British cars hold their value the best.
  • American cars are the worst at holding their value.

...read more.

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