Effects of total cost of ownership on automobile purchasing decisions


SÜTÇÜ M.

TRANSPORTATION LETTERS-THE INTERNATIONAL JOURNAL OF TRANSPORTATION RESEARCH, vol.12, no.1, pp.18-24, 2020 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 12 Issue: 1
  • Publication Date: 2020
  • Doi Number: 10.1080/19427867.2018.1501964
  • Journal Name: TRANSPORTATION LETTERS-THE INTERNATIONAL JOURNAL OF TRANSPORTATION RESEARCH
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, Aerospace Database, Communication Abstracts, Compendex, INSPEC, Civil Engineering Abstracts
  • Page Numbers: pp.18-24
  • Keywords: Partial information, entropy, cumulative residual entropy, maximum entropy, maximum cumulative entropy, PLUG-IN HYBRID, DEPENDENCE, ENTROPY, DISTRIBUTIONS, GASOLINE, COPULAS, PRICES
  • Abdullah Gül University Affiliated: Yes

Abstract

In this paper, we reveal a complete picture of ownership-related expenses and construct a decision model which helps decision maker to make the best choice when purchasing an automobile. The decision model helps the customers to understand what a car will cost beyond its purchase price when customers consider out-of-pocket expenses like fuel, repair, and insurance. Moreover, decision maker's preferences need to be elicited thowever, elicitation of these preferences is difficult when preferential dependencies exist or possible number of uncertainties is high. Therefore, we approximate representative joint probability distributions of a decision maker with partial information. We use a database of sedan models of all automobile brands and run a simulation to analyze the total cost of ownership of driving a car for 5 years. We found that even more expensive car could save more money over the first 5 years of ownership.