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Do the number of miles on your car’s odometer have that much of an effect on its resale value? In this experiment I find the answer to this pressing question.

This stock photo was obtained from automotive.com

In order to find the answer to this common question, I went to Craigslist.com. There I did a search for a fairly common car, the 2001 Volkswagen Jetta. I chose this car because VWs tend to hold their value fairly well, and Jettas are a very popular model. I conducted this search under the Seattle-Tacoma Craigslist section. The search term that I used was “2001 Jetta.” This search returned 54 results for ads that were posted from 4/1/08 - 4/8/08. Of these 54 results only 26 qualified for my statistics.

There were a few major reasons that certain ads did not qualify:

• No mileage was given
• The car listed was not a Jetta or was not a 2001 model
• The Jetta was a TDI (Turbo Diesel) model. These typically have higher resale value.
• The Jetta was a VR6 model. These typically have higher resale value.

All other models including the Wolfsburg were included.

My research found some fairly predictable data. The Y-intercept was $10,927.01. This means that a 2001 Jetta with zero miles on it should have a value of $10,927.01 based on the data. The X-variable coefficient was -$.0342. This translates into a loss in value of 3.42 cents per mile driven from the initial $10,927.01.

Based on the above data, let us calculate how much a 2001 Jetta with 80,000 miles should be worth. We can find this from the following equation. $10,927.01 + (-$.0342 x 80,000). This Jetta should be worth roughly $8191.01 according to the equation that was derived from the data.

In the study, the average 2001 VW Jetta had 82,312 miles and was selling for a price of $8,106.

The following table shows the data that I collected. The miles and price were actual data from the Craigslist listings. The projected column shows what the equation projects that the price should be based on the data. The difference column shows the difference between the projected value and the asking price. Listings that have a negative number are priced under the market value for their mileage. Listing with a positive number could be said to be overpriced in comparison to the other cars in the market.

For a scatter plot of the data, click here.

As you can see from this study, you can find good deals on cars if you compare them across a broad range of listings. In a month I may redo this study on a new batch of 2001 Jettas on Craigslist to see if the data holds up or if it has drastically changed. In most cases the graph should have a negatively sloping trendline meaning that the vehicles are worth less as the accumulate more miles.

Tags: jetta, mileage, resale, used, vw

This entry was posted on Tuesday, April 8th, 2008 at 11:16 pm and is filed under Personal Finance, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.