Work detail

Factors affecting the price of a used car in Czechia

Author: Bc. Petr Dvořáček
Year: 2021 - summer
Leaders: Mgr. Petr Polák MSc. Ph.D.
Work type: Bachelors
Language: Czech
Pages: 79
Awards and prizes:
Abstract: The market of used cars in Czechia, generating an annual turnover over one
hundred billion Czech crowns, is visited by hundreds of thousands of people a year and a
similar number of used vehicles are sold there. This work tries to find and appropriately
evaluate the main determinants that set the price of a used car in Czechia, and thus, among
other things, increase buyers’ awareness. Multiple linear regression (MLR) and the
ordinary least squares (OLS) method were used to estimate coefficients indicating the
effect of a given variable on the price. This study uses a unique dataset, which was
obtained from the Czech online marketplace advertising used cars, containing all
available information about more than 55 thousand used cars from 34 different car
manufacturers. According to the assumptions, the importance and negative effect of
variables indicating the number of kilometers driven and the age on the price of the used
car was confirmed. Other important parameters that, on the other hand, have a positive
influence on the price of a used car are the elements of additional equipment. Higher price
of used cars from German manufacturers compared to competing manufacturers was also
confirmed and, conversely, cars from carmakers from America or Asia were found
cheaper. As a huge number of variables were found, it can be stated that a used car is a
very complex product, and its correct valuation is a really is a really demanding process.
June 2023


Česká Spořitelna


Patria Finance