Saturday, December 29, 2007

Awesome Used Car Value Mapping

My brother's a commercial airline pilot and frugal like me.

He used a 1990 Taurus for his commute car to the airport for trips, and as such it was a 250k junker. When it recently kicked the can on the drive home he parked on the side of the road, called AAA to tow it away to a junkyard, and called a cab home.

My brother would also make a damn fine consultant.

After some searching he settled on buying a used Subaru outback, based upon snow performance and good reliability. His research indicated that most well-maintained Outbacks get over 200k miles before needing major work done on them.

But what year/mileage/$ to get? He plotted them, and saw that there was a consistent trend of pricing decrease a mileage increases. He took this and went to a used car dealership.

"I'll want to buy a well-maintained used Subaru, and I'll pay you $.06 per mile under 200k miles for it. I don't care how many miles it has."

Whether 50,000 or 150,000 miles, as long as he paid that price, he was indifferent. The used car dealers were blown away, and it's an awesome piece of analysis. It compresses different products into a single comparable number.

He ended up buying a used Subaru with 135,000 miles from the classifieds for 5.1 cents per mile under 200,000.

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Saturday, December 29, 2007