Core Mileage Value App
What is it for?
- This app statistically isolates the market price for a vehicle purely based upon the actual miles.
- Isolating the value exclusively based on miles provides a core market value which can then be modified as a function of quantitative, qualitative and other factors.
- Pure mileage price should be compared to actual market price with justification for the spread between the two.
How does it work?
- Submit a 17 digit NHTSA VIN and the actual vehicle mileage value – do not enter a theoretical mileage.
- The app analyzes the current market inventory to isolate and extract a mileage only based price, and the impact of miles on price, for the VIN and the mileage submitted.
- Smoothed and unsmoothed estimates are generated providing a floor and ceiling of value estimates.
How To Apply This App
- Using a vehicle’s current mileage this app estimates the vehicle’s current market value based solely on mileage. This is the market consensus price of the generic vehicle at median mileage. The app extracts this estimate from the current market inventory and generates two data models, which bracket the pure mileage value.
- A ‘smoothed’ and an ‘unsmoothed‘ model, provide pure mileage based price estimates for vehicles with mileage which is within a normal distance to the market median. Each of these models treats outlier prices differently which creates a ceiling (unsmoothed) and floor (smoothed) for the value estimate. See reference chart below.
- If they meet certain criteria the estimates can be averaged to generate a neutral estimate. see ‘Mileage Impact on Price’ below.
- The app can be used to determine the spread between a pure mileage based (generic) value and a stated market (actual) price which then must be evaluated as to why there is a difference between the two.
- Entering the market’s median mileage into the app generates estimates for the market median price. The spread between the resulting estimates of market median price and the actual market median price provide insight as to the ‘median value difference’ to the pure mileage value which is being applied to the generic median mileage vehicle in the current marketplace. This is the baseline premium or discount at the median mileage which can be used to further evaluate price differences at other mileages.
- At any given mileage, any price difference between the actual market price and the estimates, different than the ‘median value difference’, needs to be validated. This can be done by adding or subtracting any number of quantitative or qualitative value components (condition, ownership history, options, profit target, urgency to sell, market demand etc.) from the core mileage value.
- The app also generates the theoretical percentage of the vehicle’s value which can be explained solely by mileage. This measure of ‘Mileage Impact on Price’ can be used to gain a better understanding how much influence mileage has on price. Mileage Impact on Price is an indicator as to how much mileage is affecting price in general, it is not a mathematical construct to be applied to generate a value estimate.
- A low Mileage Impact on Price value indicates little influence on price, for example new cars. A high Mileage Impact on Price indicates significant influence on price, such as a widely price distributed market or a market with a high inventory count. The rest of a vehicle’s value must be explained by other factors, even if the dollar amount in question is relatively small. The larger the percentage not explained by mileage the more the required justification.
- Mileage Impact on Price can be used to select the best fit estimate model with the higher percentage being the more statistically robust estimate. Mileage Impact on Price can also be used to determine if the two estimates can be averaged. If both values are between 40% and 70% then the average may provide the best fit estimate. If not then the estimate with the highest Mileage Impact on Price value should be used.
- Click the button links to the Valuation Kit App to compare the core market value estimates to the current market.
- Check core market value estimates against comp vehicles in the current market inventory using the Market Inventory Value Snapshot Chart.
- Note that the smoothed estimate can over value vehicles which are outliers with low mileage and should be used with caution in those cases. The unsmoothed estimate can under value vehicles which are outliers with high mileage and should be used with caution in those cases. See reference chart below.
- Not all models are available in this application. Some bodies are combined into ALL for the body parameter in order generate statistically valid results. View the covered models list.
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