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"High Miles!" equals "Low Price!" - Study says mileage biggest factor in depreciation

Study names mileage as biggest depreciation factor
Photo: Flickr/CC - Foot Slogger

National automotive superstore CarMax commissioned Ipsos Public Affairs for a study to determine what scares potential pre-owned buyers the most. The results seem a little backward at first blush, with mileage being called out as the biggest demon ahead of other issues like accident or flood damage, or past maintenance.

You'd think the most important determining factors when assessing a car's value should be condition and maintenance. Auto Broker Examiner Isaac Bouchard points out that there really are two differing interests at work;  "A dealer can make any car look so good through proper reconditioning that to the average consumer, they all look like nice clean cars when they're sitting on the lot." The dealer is going to buy the car that's easiest (i.e. least expensive) to recondition, which explains why they're willing to give you a good value if you've got an exceptionally clean trade.

For average buyers, dealer lots are a sea of equally shiny automobiles, so mileage becomes very important, Bouchard explains. While dealers will inspect and repair any vehicle they plan on selling, Bouchard's strategy is to "try not to keep any inventory that's not really, really nice...but keep in mind that we always try to adjust our bidding for mileage accordingly, so we can be market-correct on pricing."

What's a buyer to do? 

In light of the many tales of ultra-high mileage cars that are still driven daily - Rachel Vietch and her 600,000-mile Mercury Comet and Irv Gordon's Guinness Record Volvo P1800, currently closing in on 3 million miles, there's certainly no substitute for sticking it out with a vehicle by keeping it maintained and in good repair. Take care of a car, and mileage becomes just a number of little consequence if you plan to hang on until the bitter end.

If you're buying or selling, though, mileage is certainly something that can cost you on a trade, and save you some bucks on a purchase. Careful carbuying certainly takes mileage into account, but far and away the most important things to find out about the car you're going to tie up thousands of dollars and years of commitment in are condition and past damage. In the CarMax study, damage, past maintenance, and the current market average round out the top four factors that consumers consider when purchasing.

In the interest of stimulating our economy, perhaps your thoughts have turned toward trading your car and getting into something minty-fresh. Lowball offers for trades are a common concern, and CarMax wants potential customers to know it's got that base covered, too.  The company is offering to evaluate your current vehicle free of charge and offer you what it considers a fair price to take your old wheels off your hands.

CarMax will give your old jalopy a thorough perusal, and offer you money, even if you're not buying anything. If your car doesn't qualify for Cash For Clunkers, but you still want to replace it without the hassle of trying a private sale, it sounds like a winning proposition. CarMax finds some new potential inventory, you get (hopefully) a healthy stack of bills for that '93 Tempo, and everyone's happy. 

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