Sage Price™
What is it for?
- Mileage is the largest single factor measurable across the market inventory. Extracting that value allows for price evaluation to be made on other factors.
- By statistically extracting both pure mileage and the baseline non-mileage based values, implied for a given mileage by the market inventory, a remaining value of unexplained pricing can be identified.
- This now identified unexplained price difference becomes the context for further analysis as to what the other factors are, tangible and intangible, and how they are measured and justified.
How does it work?
- Submit a VIN, the vehicle’s price and actual mileage.
- The app determines the best fit statistical model for the market inventory distribution and uses this model (smoothed, unsmoothed, average) to isolate both the pure mileage based, and baseline non-mileage based, values for a baselne vehicle with the submitted mileage.
- Once the best fit statistical model adjusted price estimate is isolated, it is subtracted from the submitted vehicle price with the difference being the unexplained price component of the submitted price.
How to Apply This App
- Using a vehicle’s current mileage, and the current market inventory, this app estimates the vehicle’s current market price based solely on mileage. It then measures the baseline non-mileage value component generic to the market inventory at the submitted mileage. These values combined are the market consensus price of a generic vehicle with the submitted mileage.
- This generic adjusted price estimate is compared to a stated price to understand a vehicle’s price over or under the generic market.
- Use the ‘Best Fit Model Price Estimate’ to understand a vehicle’s pure mileage value in the current market inventory. This is the market value of a generic vehicle at the submitted price excluding all other factors..
- Use the ‘Statistical Baseline Market Price Adjustment’ value to understand the base non-mileage price in the market for a vehicle with the submitted mileage. This non-mileage price component is an intangible value common to the market which cannot be explained.
- Use the ‘Unexplained Difference Between Price and Fully Adjusted Mileage Based Price Estimate’ to understand how much of a vehicle’s price must be explained by other tangible and intangible factors not measurable by advanced analytics. These factors could include qualitative value components such as condition, ownership history, options, profit target, urgency to sell, market demand etc.
- The pure mileage based mileage estimates are displayed for each of the three statistical models evaluated for use by the Sage Price app, along with an estimate of the theoretical percentage of the vehicle’s value which is influenced by mileage. Mileage Influence on Price is not a mathematical construct to be applied to generate a value estimate and it cannot be translated directly into dollars. It is an indicator as to, at the limit of pricing, how much factors which are mileage, and not mileage, are affecting the final stated price. For example new cars have a low Mileage Influence on Price. Older, widely distributed models, have a high Mileage Influence on Price.
- Click the button links to the Valuation Kit App to compare the Mileage Based Market Price estimates generated by the three statistical models to the current market.
- 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..
Typical Market Inventory - Sorted Mileage Low to High
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