In the United States, the average selling price for a new light vehicle was approximately 36,800 U.S. dollars in 2019. New automobiles and light trucks were on average almost 16,000 U.S. dollars more expensive than used light cars: the average selling price for used vehicles amounted to about 20,840 U.S. dollars in 2019. In light of a growing price gap between new and used cars, an increasing number of U.S. households will likely choose a used car over a new one.
The issue is whether or not it is possible to estimate the selling price of a used car. We have used a dataset comprising 120 records describing 120 used vehicles. The descriptions contained 24 different fields of information, which can be summarized as follows:
Current approaches for used car price computation are basic and calculate a rough average, which does not account for a particular used car’s specificities. Instead of these outdated solutions to get a listing price for a used car, Quaartz can compute an exact price estimate.
It raises the following question:
Is it possible to predict the selling price of a specific used car?
In this regression use case, Quaartz can predict a used car’s price with an R2 of 88%, a MAPE of 11%, and an RMSE of 1769.
Buying a used car is the number one choice in most western countries. There are about 280 million vehicles in operation in the United States, an increase of about 1.6 percent. The rising demand for used cars means that used vehicle inventories are declining. As a result, used-vehicle prices are expected to increase.
Financial reports have exposed how the coronavirus pandemic outburst has triggered a change in vehicle-buying behavior in the United States. With various consumer goods and services presently purchased online due to Covid-19, the auto industry has also begun to integrate its services online to reach consumers digitally. This trend makes it all the more essential to have simple access to used car price estimations.
Quaartz has selected the following five main criteria out of the twenty-four available in the dataset:
In one week, car sellers managed to build a used car price estimator with an excellent R2: