Advanced Feature Engineering and Machine Learning Techniques for High Accurate Price Prediction of Heterogeneous Pre-Own Cars

Imran Fayyaz, G. G. Md. Nawaz Ali, Samantha S. Khairunnesa

The rapid growth of the automobile industry has intensified the demand for accurate price prediction models in the used car market. Buyers often struggle to determine fair market value due to the complexity of factors such as mileage, brand, model, transmission type, accident history, and overall condition. This study presents a comparative analysis of machine learning models for used car price prediction, with a strong emphasis on the impact of feature engineering. We begin by evaluating multiple models, including Linear Regression, Decision Trees, Random Forest, Support Vector Regression (SVR), XGBoost, Stacking Regressor, and Keras-based neural networks, on raw, unprocessed data. We then apply a comprehensive feature engineering pipeline that includes categorical encoding, outlier removal, data standardization, and extraction of hidden features (e.g., vehicle age, horsepower). The results demonstrate that advanced preprocessing significantly improves predictive performance across all models. For instance, the Stacking Regressor’s R2 score increased from 0.14 to 0.8899 after feature engineering. Ensemble methods, such as CatBoost and XGBoost, also showed strong gains. This research not only benchmarks models for this task but also serves as a practical tutorial illustrating how engineered features enhance performance in structured ML pipelines for the fellow researchers. The proposed workflow offers a reproducible template for building high-accuracy pricing tools in the automotive domain, fostering transparency and informed decision making.