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Impact of the model life cycle on the residual car value in the leasing industry

Greim, Lena (2017) Impact of the model life cycle on the residual car value in the leasing industry.

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Abstract:Setting the residual value is a difficult task, as it involves making estimates about the future. In line with literature and company experts it is hypothesized in this thesis that the model life cycle of cars has a negative effect on the residual value. In order to test this hypothesis a multivariate analysis is applied to test whether cars whose model design becomes older have a more negative effect on the residual value than cars whose model design is still new. The regression results show in a few cases a negative effect on residual car value by the model life cycle. However, those results often lack significance, which does not allow to draw conclusions for each and every car model. Possible explanations for the results are consumer perceptions, market conditions, and seasonal fluctuations which cannot be captured in the analysis. Overall, the findings for age and kilometers are consistent with previous findings, however, the findings show different effects (negative) for diesel which is a determinant with a positive effect in previous studies. Engine power (kW) shows a positive effect on residual car value, but results are not consistent for all models.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/72764
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