February 23, 2019

Used Car Price Confusion

My car strategy has long been to buy a new car and keep it for 10 years.  This time though I decided to buy a used car with low miles (under 25k).  I found one I liked on Carvana at a price I liked.

Out of curiosity I’ve looked at some of the prices for the same exact vehicle on Carvana and CarMax websites but with more miles.  And what I saw surprised me.   There doesn’t seem to be a corresponding decrease in price of the car commensurate with increased miles.

I’d pictured car depreciation as more or less straight-line until the end when the value decrease slows dramatically. 

So I graphed (in blue) my own rough prediction of car value decrease over time (uniform until around 110k miles), and, in green the various real world prices.  The first green one is the car I bought and the only non-outlier. Or it’s possible I got a good deal and it’s the outlier. 

The X-axis is number of miles driven, in thousands. 

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