Price Determinants on Used Car Auction in Taiwan

Meng, Shiang-Min; Liu, Li-Jen; Kuritsyn, Mikhail; Pechnikov, Vladislav · 2019 · OpenAlex-citations

DOI: 10.18488/journal.1.2019.91.48.58

archive: archived pipeline: cataloged verified

Get this paper ↗ (DOI — opens at the source; we link to it, we don't host it)

Summary

This study investigates the determinants of used car prices in Taiwan’s auction market, focusing on locally produced passenger vehicles with final prices under one million New Taiwan Dollars. The research addresses the complexity of used car valuation, where intangible factors like brand reputation and observable characteristics like condition and age interact. By analyzing auction data, the authors aim to identify which variables significantly influence final transaction prices, providing insights for traders, buyers, and policymakers regarding vehicle depreciation and market dynamics. The methodology utilizes a dataset of 504 successful transactions from the Taiwan used car auction website “www.sinjang.com.tw.” The study employs log-linear multiple regression models estimated via ordinary least squares. The dependent variable is the logarithm of the final price. Independent variables include vehicle age, engine displacement, mileage, body and interior condition ratings, vehicle type (wagon vs. sedan), confiscation status, transaction day (Friday vs. Wednesday), and a dummy variable for Toyota brand. To account for non-linear effects, a second model introduces a quadratic term for engine displacement. The analysis excludes trucks, imported cars, and luxury vehicles to maintain sample homogeneity. The results indicate that the polynomial log-linear model (Model 2) provides a better fit, explaining 75.8% of the price variation, compared to 74.8% for the linear model. Most variables are statistically significant at the 1% level. Key findings include a 25% price reduction for confiscated vehicles and a 14.7% decrease in price for each additional year of age. Good interior condition adds approximately 22.9% to the value, while good body condition adds 5%. Wagon-type vehicles are 16.9% more expensive than sedans. Transactions conducted on Fridays result in prices 7.1% lower than those on Wednesdays, likely due to sellers’ urgency to avoid holding costs. Toyota vehicles command a 19.3% price premium, reflecting strong brand reputation. Notably, mileage was not a statistically significant determinant in either model, which the authors attribute to dealers’ ability to adjust odometer readings. The quadratic engine term reveals that the marginal effect of engine size on price diminishes after 2.46 liters, aligning with Taiwan’s tax structure where larger engines incur significantly higher annual taxes. The study concludes that specific vehicle attributes and market conditions significantly drive used car prices in Taiwan. The insignificance of mileage challenges conventional literature, suggesting unique market behaviors among professional buyers. The strong positive coefficient for Toyota highlights brand loyalty’s impact on resale value. Furthermore, the diminishing marginal return on engine size beyond 2.46 liters demonstrates that government tax policies effectively influence consumer choices and vehicle depreciation rates. These findings offer practical guidance for used car traders in pricing strategies and for local authorities in designing tax policies to manage vehicle displacement preferences.

Provenance

The full processing record for this entry. Every stage of this paper's journey through the pipeline is logged — what ran, with which tool and model, how many attempts it took, and when it last completed.

Summary generated by qwen3.6-27b-prismaquant on 2026-06-26; verification: verified.

Topics

Ranked by relevance to this paper. Hover a topic for its definition.

• exposure measurement