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