Pricing my Subaru Outback for Resale
It has to happen one day, you need to let go of your old(er) car before the maintenance costs become more expensive than the price of a new car – after all, a car’s an expense, not an investment.
I’ve always found that the toughest thing is to evaluate how much an older car is worth. Sure, there are little booklets to help out for sale at the local autoshop, but they typically don’t have any numbers when you’ve put a lot of mileage on your car – and we did.
Our Subaru Outback 1999’s odometer reads 242,000 kilometers, although it’s probable more like 275,000 (approx 172,000 miles) … since our speedometer has only be running intermittently in the last year or so. But I figured: ‘Hey, I’m a geek … I can use software to help out!’
So I launched my favorite classifieds site (Les PAC, which stands for Les Petites Annonces Classées) and started looking for 3 things in each car ad: year, mileage and price. In the end, I was able to find 12 cars in the 1998-98 range, which offered both a mileage and a price.
I plotted in Excel the values using an XY Scatter chart type, where x = mileage and y = price. I then added a trend line and clicked on the option to show the equation.
I haven’t done trig for a while now, but the equation is basic enough and came back as y = -1026.3Ln(x) + 20273. BINGO !
So by substituting x for my car’s odometer reading, I get $7,672, which is the price given my car’s mileage. This is great because I now have a much better idea of my car’s worth as I walk into the dealership to trade it in. Yeah, I won’t make as much as selling it privately, but I’m a no-hassle kinda guy. So long as I get a decent price (they have to make a small profit to cover for a tune-up, cleanup, etc), I’ll be happy.
Of course, you could argue that my R2 is low, that my sample is small, that maybe choosing a polynomial instead of a logarythmic regression might be better – but I wanted a quick result – and this exercise took me all of 30 minutes, data compilation included. Anyway, there’s a French saying that ‘Better is the ennemy of Good’.
This was just an example to show how easy it is with the internet to make better financial decision, given the amount of data available. Before, I would have had to buy those Car for sale magazines and look through a bunch of papers and probably wouldn’t get as many hits as I did today on a single website.