Think you are shopping wisely for a used car? New research from the McCombs School of Business at the University of Texas at Austin suggests that even careful buyers may be swayed by something as simple as the first digit on the odometer when judging a vehicle’s value. This subtle influence can shape perceptions of worth in ways that are not entirely rational, leading consumers to make decisions they might not otherwise make if they considered the full picture.

At the heart of this behaviour is left-digit bias, a well-documented psychological tendency. People often perceive £1.99 as significantly cheaper than £2.00, even though the difference is negligible, because their attention is drawn disproportionately to the leftmost digit. This cognitive shortcut simplifies decision-making but can distort judgment. When applied to car mileage, the same bias can lead buyers to overvalue vehicles that appear to fall just below a round-number threshold.

This inattention can prove costly. According to research led by marketing professor Raghunath Rao, when a car’s odometer reads just under a multiple of 10,000 miles—for instance, 49,999 instead of 50,000—buyers may be willing to pay notably more than the car is objectively worth. On average, this premium can reach as much as $170 per vehicle. Rao describes this extra amount as a kind of “mental tax” that consumers unknowingly impose on themselves by failing to assess mileage more carefully.

Although private sellers may not consistently take advantage of this tendency, dealerships are often more attuned to it. The study suggests that professional sellers are better positioned to recognise and capitalise on consumer biases, effectively capturing that “mental tax” as additional profit. In this sense, the marketplace does not simply reflect value; it also reflects how value is perceived, particularly when buyers rely on quick heuristics rather than detailed evaluation.

To explore this phenomenon, Rao and his collaborator Andreas Kraft analysed Department of Motor Vehicles data covering 4.8 million used car transactions in Texas between 2014 and 2021, representing roughly 10% of all such sales in the United States. They examined pricing and sales patterns around mileage thresholds such as 20,000, 50,000, and 100,000 miles. Their findings showed a consistent pattern: cars just below these cut-offs tended to sell at higher prices and more quickly than nearly identical cars just above them. The effect was especially pronounced at dealerships, where the bias appeared roughly twice as strong as in private sales, and was most evident around the 100,000-mile mark.

Importantly, the implications of left-digit bias extend beyond mileage alone. Similar patterns may influence how consumers evaluate other product features, such as the battery range of electric vehicles. A car advertised with a range of 310 miles may seem far more appealing than one with a range of 280 miles, even if the practical difference is relatively modest. The broader lesson is not directed at sellers but at buyers: awareness of these unconscious biases is essential. By consciously considering all available information rather than focusing on a single prominent digit, consumers can make more informed and financially sound decisions in any major purchase.

More information: Andreas Kraft et al, Market Effects of Inattention: Theory and Evidence from Left-Digit Bias, Journal of Marketing Research. DOI: 10.1177/00222437261427475

Journal information: Journal of Marketing Research Provided University of Texas at Austin