The primary objective of this project is to identify the determinants that influence the pricing of used cars. Using a comprehensive dataset from Kaggle, which comprises data on three million used vehicles, this project aims to analyze various factors and provide actionable insights and recommendations tailored for a used car dealership to enhance their business strategy based on consumer preferences.
This analysis is conducted as a component of the curriculum requirements for the Professional Certificate in Machine Learning and Artificial Intelligence at UC Berkeley.
- Model Impact:
- Higher-priced models: 1500, Silverado 1500, F-150
- Lower-priced models: Camry, Altima, Civic, Accord
- Year of Manufacture: Vehicles are segmented by year groups with notable price variations:
- 2017-2020 models predominantly occupy the higher price bracket.
- 2012-2017 models are generally in the medium price bracket.
- 2006-2008 models are commonly found in the lower price bracket.
- The year 2017 shows an equal distribution between medium and high price ranges.
- Odometer Reading: Lower odometer readings are consistently associated with higher vehicle prices.
- Condition:
- Good to medium condition vehicles are mostly priced higher.
- Excellent condition vehicles are predominantly medium and low priced.
- Vehicles in fair and salvage conditions are usually priced lower.
- Prioritize Recent Models: Focus on acquiring and stocking vehicles from post-2017 to align with consumer preferences for newer cars. Older models, especially those from 2008 and earlier, should not be prioritized and, if listed, should be priced more affordably.
- Odometer Reading Strategy: It is advisable to acquire and promote vehicles with odometer readings below 50,000 due to their higher valuation. Vehicles with odometer readings exceeding 110,000 should be listed at competitive prices to attract buyers.
- Condition-Based Pricing and Listing: Emphasize vehicles in good, medium, or like-new conditions as these are highly valued in the market. Listings for cars in fair or salvage conditions should be minimized and priced lower to reflect their condition.
- Model-Specific Pricing: High-demand models such as the 1500, Silverado 1500, and F-150 can command higher prices. Conversely, models like the Camry, Altima, Civic, and Accord, which are less valued, should be priced more accessibly to increase turnover.
By aligning inventory and pricing strategies with the highlighted trends and consumer preferences, the dealership can enhance its market position and profitability.