When Good Cars Lose Value

Tom owned a used car dealership. Every month, he bought vehicles at auction and resold them. But too many cars sold below their expected market value (MMR). He was losing money on good inventory, and he didn't know why. Some cars that looked perfect on paper—low mileage, good condition—still lost thousands at sale.

Tom hired a data analyst to study his sales records and find patterns. The analyst looked at mileage, condition ratings, and sale prices. The goal was simple: figure out which cars lose value and why, so Tom could stop buying the wrong vehicles and price the right ones better.

The data revealed something unexpected. Medium-condition vehicles—not the worst ones—were most likely to sell below MMR. Over 750 medium-condition cars with more than 100,000 miles underperformed. High-mileage cars in any condition were risky, but medium-condition vehicles consistently disappointed across all mileage groups.

The analyst found a critical mileage threshold: 8,145 miles. Once a vehicle crossed this mark, resale values dropped even for cars in good condition. Tom had never tracked this number before. Now he knew exactly when a car's value started falling, regardless of how well it was maintained.

High-condition vehicles showed the biggest surprise. When they sold below MMR, they lost the most money—around $1,000 on average for high-condition cars with over 100,000 miles. Tom thought pristine cars would hold value best, but the data said buyers weren't willing to pay premiums for excellent condition, especially on high-mileage vehicles.

Certain brands were trouble. The Audi A4 had the highest average loss at $13,800 when sold below MMR. Chevrolet, Ford, Nissan, and Land Rover models also underperformed consistently. Tom realized some brands just didn't hold value in his market, no matter their condition or mileage.

Tom changed his buying strategy at auctions. He avoided medium-condition vehicles entirely—they were the worst performers. He stopped buying cars over 100,000 miles unless the price was extremely low. He watched the 8,145-mile threshold closely and tried to sell cars before they crossed it. He became cautious about high-condition vehicles, knowing buyers wouldn't pay what he expected.

He adjusted his pricing too. High-condition cars got priced closer to market average instead of at a premium. Medium-mileage vehicles (25,000-50,000 miles) in good condition became his sweet spot—they showed smaller losses and sold more reliably. He avoided Audi A4s and other consistently underperforming models.

Tom focused his reconditioning budget on vehicles that mattered. Medium-condition cars with moderate mileage got detailing and repairs to move them into the "good" category. He stopped wasting money on high-mileage vehicles that couldn't recover their value no matter how much work he put in.

He marketed aggressively before the mileage threshold. Cars approaching 8,000 miles got promoted heavily to sell before hitting the depreciation point. He educated buyers about the value of moderate-mileage vehicles instead of pushing low-mileage cars that were overpriced.

The data showed Tom that his instincts were wrong. He'd been buying high-condition, low-mileage cars thinking they were safe bets. But those cars often didn't meet buyer expectations at premium prices. Medium-condition cars were traps—they looked like deals but consistently underperformed. The market valued moderate mileage and realistic condition far more than pristine appearance on paper.

Today, Tom buys smarter. He targets 25,000-50,000 mile vehicles in good condition, avoids problem brands, and prices based on data instead of hope. He knows the 8,145-mile threshold and sells before it. He's still losing money on some vehicles—that's the nature of the business—but now he knows which risks to avoid and which cars will hold their value.