A Timely Math Lesson
How small statistical samples can lead you in the wrong direction.

Picking out an extreme statistical example in meetings with customers can be misleading.
Pexels/Lukas
Math was always my weakest subject in school, and I studiously avoided the more advanced courses as much as possible. Though I did take statistics in college, I remember nothing from the class, at least not consciously.
My career as a writer and editor has ironically forced me to get better at my everyday use of numbers to make sense of data and communicate it to readers. And in my current reading of a book by Nobel Prize-winning psychologist and researcher Daniel Kahneman, who died last March, I’m learning more that’s helping me make better sense of automotive industry statistics.
“Thinking, Fast and Slow,” published in 2011, is jam-packed with insights on how the human mind works, from decision-making to how we form impressions and interpret our world.
One chapter in particular helped me gain new insight that could come in handy in the F&I office. It digs into how small research samples can be misleading. An example is a high rate of new kidney cancer cases in sparsely populated U.S. counties. Kahneman explains that, “extreme outcomes (both high and low) are more likely to be found in small than in large samples.”
So when I saw a recent LendingTree study about car thefts that pointed out a dramatic spike in Vermont between 2020 and 2022, I left the example out of my news item on the report. That’s because Vermont is the second smallest state by population, with far fewer residents than many larger U.S. cities. It’s an example of an extreme outcome.
What does this have to do with F&I? I share it because F&I managers need examples of the latest research to demonstrate their expertise and make relevant points to customers. Picking out extreme examples such as the Vermont theft rate could be misleading, painting a picture of car thieves run amuck on every street in the largely rural state, whereas the theft rate per 100,000 residents in 2023 would offer much more reality. The District of Columbia leads that list at about 1,150, according to LendingTree data.
Or as Kahneman further explained in the kidney cancer example:
“The incidence of cancer is not truly lower or higher than normal in a county with a small population, it just appears to be so in a particular year because of an accident of sampling. If we repeat the analysis next year, we will observe the same general pattern of extreme results in the small samples, but the counties where cancer was common last year will not necessarily have a high incidence this year.”
Even though I hated math growing up, I did appreciate the rare math teacher who was good at breaking it down into bite-sized steps that even I could absorb and understand. Kahneman was just one of those teachers that I happened upon. Hopefully his analysis will help you, too.
Hannah Mitchell is executive editor of F&I and Showroom.A former daily newspaper journalist, she honed her craft covering politics, business and more for publications that included the Charlotte Observer and the Orange County (Calif.) Business Journal. She holds a master’s degree in journalism from Columbia University, and her first car was a hand-me-down Chevrolet Nova.
Originally posted on F&I and Showroom
More Industry

Pennsylvania Dealership Under New Retailers
The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.
Read More →
Battery Storage Takes Priority Over EVs
U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
New-Vehicle Sales Picture Relative
A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.
Read More →
Auto Group Acquires Third Nissan Rooftop
Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Building an Extraordinary F&I Agency
Work to determine your specialized talent, because that fact will determine everything about your agency’s future.
Read More →
Recipe for Compliance
The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.
Read More →
EVs Getting More Attractive
A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.
Read More →
EV Sales Drop in April Following Surge
North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.
Read More →