Data Science

Buying a Car Using Data Science

Applying data everywhere

When I buy a car, I want to make sure I’ve done the research considering the price. The two times I’ve bought a car, I put a lot of work into researching what I wanted to gain from buying a car and understanding the pros and cons completely. I wanted to have surety with each purchase, and I wasn’t going to make a spontaneous decision. By I, I mean we because my wife and I bought both cars. Here is that story and the data we used to make that decision.

The Honda Fit

Back in 2008, the recession hit right before we got married. It was a weird time to have a wedding, and we were already very cost conscious. Combined, we had close to $90,000 of student loan debt, and our two jobs combined for just shy of $50,000 a year before taxes as I was still in graduate school, and she just had a job to pay the bills.

Requirements:

1. Low depreciation
2. High MPG
3. Cost Effective

We decided to buy a new car because one of our cars was not reliable for long road trips. We needed a car that was affordable, reliable, and resell-able in case I was unable to find a job post-graduation. We wanted to be able to sell the car in a pinch which meant the car depreciation had to be kept to a minimum.

One aspect of affordability was the miles per gallon (MPG) of the car. This was key because again, at the time, gas was $4 per gallon. We didn’t want to have to budget around the price of gas.

So I put together an excel sheet with the cars we were looking at, the important features, and then did some rough lifetime cost calculations including fuel and generally assuming the maintenance would be the same across vehicles.

The 1990 Volvo was the car I had been driving, and the 2008 Honda Civic was known to be very reliable.

At the end, it came down to the Honda Fit and the Ford Focus. The 2008 Fit was a little cheaper, but the 2009 had seats that went flat. We decided to go with the 2009 Fit because the cargo capabilities and the resell value were better than the Focus.

We went to the dealer, knowing the invoice price, and we negotiated to pay only $50 more. We almost walked away. The end result was a car we loved and still love because of its utility. We also discovered that everything fits in the Fit, and the Fit fits everywhere.

The Honda Odyssey

In 2010, we went to having only one car, our Fit. We lasted 7 years as a one car family because I was commuting to work on the Megabus, and we simply could live without an extra car. The time was fast approaching when we needed a second car not just for the seating and cargo but because our two kids could reach each other and were harassing each other often. We finally gave into the dark-side and decided to get a minivan.

Our requirements were a bit more than before:

1. 7+ seats
2. Leather seats
3. Remote starter
4. Cargo area on par with the Honda Fit
5. DVD player with screens for the kids
6. Car Play (Preferable)

I mainly stuck to minivans in my search because SUV’s sacrificed cargo space when you use the third row. With these initial requirements, I found out most vans satisfied the first 4 requirements. I compiled a new set of data to help identify the right choice.

We also considered a used car, but the previous year models for most minivans didn’t have the automated cruise control and lane following. That was not initially desired, but as we considered our longer road trips, we thought it could be useful.

Another factor dissuaded us from a used car: money. Specifically, cost per mile. I examined cost per mile, and it seemed the depreciation for most minivans, particularly Honda, were proportional to the number of miles. So after driving the car for a 200,000 miles, you paid almost the same per mile whether it was new or used, but being used, you have the drawbacks of not knowing where the car came from and missing out on the first 10K’s of miles where you don’t have to worry about stuff breaking down.

This narrowed our options significantly. It turned out that Car Play was the deciding factor, which only the Honda Odyssey had. We have iPhones, and we had messed around with Chrysler’s infotainment system before. It wasn’t so good.

The final choice we had to make was with or without the DVD player. It was sold with a navigation system that cost $2,000. We could buy each kid an iPad for that much and not have to worry about them fighting over what to watch. Besides, we hadn’t bought a DVD in years.

We quickly found out the automated cruise control was very helpful in relaxing while driving as it would speed up and slow down with the ebbs and flows of traffic. The lane following feature was super helpful in making long distance driving not as strenuous. We also liked knowing more intuitively where the controls were as a result of it still being a Honda.

I’m glad I put the work into collecting the data and making sure I understood the implications of each possibility. This data helped remove the choice because the choice became clear in both cases.