Monday, April 6, 2015

Data Analysis Clearly Shows Some Sort Of Something

This weekend I discovered that reports from Quicken, a home cash management program, can be downloaded into Excel. Thus the above scatter diagram was born.

The graph shows how our 2001 Nissan Maxima, a car referred to as The Finest Car Ever Made, ran up increasingly significant repair bills in the last six years of its life with us. Each data point reflects date and amount of money paid for a repair. Oil changes and tires are not counted. The trend line reflects an averaging of payments.

The narrative fallacy refers to our tendency to construct stories around facts, a subconscious tendency to help give greater clarity to why things happen. But when someone begins to believe the stories and stretch the facts to accommodate the narrative, the accuracy of the story is likely to suffer.

I held on to the car too long because I enjoyed driving it. My fallacy was that I fervently believed I could drive it 200,000 miles before it would "really" fall apart. The car was at 160k when we donated it to charity -- it subsequently sold for $625 at auction. 

All told, very few repairs before 2008, after, $13,244. I can make myself feel better by amortizing the repairs bills in my imagination over the life of the car, coming out to around $1,000 a year -- not an outrageous sum when all the expenses of car ownership are considered. Still, I should have gotten rid of it at the ten-year mark.

I liked the car because I was able to configure it for just about any activity, camping, ski trips, bicycle transport, and still have an everyday sedan to take the kids to school in. A powerful engine and good handling made me call this car The Finest Car Ever Made.

A happier moment with the car.

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