- If you are valuing a vehicle and you know the actual odometer mileage, enter the actual mileage.
- If you have a portfolio of vehicles and their current mileage is unknown, then use the mileage as provided by our analysts. The mileage valuation adjustment will be zero.
In order to determine if a vehicle valuation needs a dollar adjustment due to mileage, we have to determine what is the typical or expected mileage for the vehicle.
Mileage adjustments are based on a statistical model, which estimates the impact of mileage to the price of an individual vehicle, based on its characteristics – for example, its age or brand. We also assume that a vehicle accrues mileage at a given rate, which changes over time.
This model generates a monthly individual mileage adjustment curve for every unique vehicle, and these curves are used in two ways:
1. At the individual vehicle level – every vehicle has a unique mileage adjustment curve each month – this level of detail is used for Weekly Auction Values and most of our consulting products.
2. At an aggregated vehicle level – to create one unique curve for each mileage category. This level of detail is used for the guidebooks.
In both cases, the mileage adjustment curve tells us the financial adjustment needed for a given difference between expected (sometimes called “acceptable”) mileage and the actual mileage for each individual vehicle.
In the guidebooks:
- the mileage is grouped into 5,000 mile bands – the adjustment for a vehicle with 5,700 miles would be the same as a vehicle with 9,500 miles because both fall in the 5,000 -10,000 mileage band.
- the vehicles are grouped into 5 Classes (I, II, III, IV, V) based on:
1) The mileage category of competitive vehicles
2) The price effect of high or low mileage on that vehicle
- Dollar adjustments on vehicles in low mileage classes (e.g. I or II) are relatively mild for both low mileage price adds and high mileage price deductions. Examples are Chevrolet Sonic, Ford Fiesta, Honda CR-V, Hyundai Accent, KIA Rio, Mitsubishi Mirage, Toyota Corolla, VW Golf.
- Dollar adjustments on vehicles in high mileage classes (e.g. IV or V) are more pronounced on both the high and low mileage adjustments. Examples are Audi, BMW, Cadillac, Infiniti, Jaguar, Land Rover, Lexus, Lincoln, Mercedes-Benz, Porsche, Tesla.