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Modeling failure of a used car doesn't seem that different to me than a new car. There is a distribution, probably more expensive for slightly used cars. It can
by ivankirigin 13y ago
Modeling failure of a used car doesn't seem that different to me than a new car. There is a distribution, probably more expensive for slightly used cars. It can be modeled and incorporated into price.
- sliverstorm 13y agoIt can be modeled and incorporated into price. I don't have evidence, but I expect once you correctly account for the risk in your cost model, your pricing will be wildly unattractive.
- ivankirigin 13y agoYep, I haven't modeled this out. If anyone wants to do the legwork, compare the cost of a 2014, 2013, 2012, and 2011 basic package honda civic, and the maintenance cost estimate for the next year of each. I'd expect the depreciation from 2-3 years in life to be a small fraction of 0-1 years, with slightly higher maintenance.
- sliverstorm 13y agoThe problem isn't depreciation vs. normal maintenance. The problem is the occasional write-off of an entire car because the moronic previous owner didn't change the oil for the first 30,000 miles. For example.
- prostoalex 13y agoRequiring proof of regular maintenance or even owning the process of maintenance is pretty common for dealerships. http://us.lexusownersclub.com/forums/topic/70591-is-it-mandatory-for-a-lease-owner-to-perform-scheduled-maintenance/ http://us.lexusownersclub.com/forums/topic/70591-is-it-manda...
- sliverstorm 13y agoOk, maybe if you buy only leased vehicles you could CYA enough. But this thread was about "used vehicles", no?
- prostoalex 13y agoOh, sorry, I misunderstood the nature of risk you're describing. You referred to lack of maintenance by the previous owner, I thought you meant lack of maintenance on the vehicle while on the lease. A good mechanic would be able to at least quantify the risk level on a used car, it seems, with X-point test that most of "certified pre-owned" places conduct.