FI showroom red and grey logo
MenuMENU
SearchSEARCH

A Timely Math Lesson

How small statistical samples can lead you in the wrong direction.

by Hannah Mitchell
January 16, 2025
A Timely Math Lesson

Picking out an extreme statistical example in meetings with customers can be misleading.

Credit:

Pexels/Lukas

3 min to read


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.

Ad Loading...

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:

Ad Loading...

“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.

Subscribe to Our Newsletter

More F&I

Photo of a keyring with mltiple keys, including a car key fob, on a white surface
F&IJuly 15, 2026

Integrating Nontraditional F&I Products

The niche presents a strategic advantage for auto dealerships as they move to adapt to fast-changing consumer expectations in today’s market.

Read More →
Photo of businessman's hands holding eyeglasses at a desk
F&Iby Rick McCormickJuly 7, 2026

Trust Is Personal

Technology, no matter how efficient, can’t replace what the human F&I manager can do, which is to bridge the divide between cyberspace and the in-store experience.

Read More →
Photo of executive in a sports coat and glasses
Industryby StaffJuly 2, 2026

Amplify 2026 Billed as Turning Innovation Into Results

Reynolds and Reynolds says its annual retail summit will connect dealers with practical strategies, peer insight, and technology-driven ideas.

Read More →
Ad Loading...
Woman standing on stage smiling.
F&Iby Lauren LawrenceJuly 1, 2026

Own Your Outcome: F&I in the Digital Customer Journey

Finance has historically been the last step in the car-buying process, but it doesn’t have to be. The customer’s journey starts long before they arrive at the dealership, and so should F&I’s involvement.

Read More →
$100 bill and magnifying glass on top of paper that says insurance policy terms and conditions.
F&Iby Lauren LawrenceJune 29, 2026

Tariffs Could Raise Insurance Premiums

As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.

Read More →
Red toy car sitting on top of coins.
Auto Financeby Lauren LawrenceJune 24, 2026

Smaller Loans, Longer Terms

The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.

Read More →
Ad Loading...
Under the hood of a Toyota Prius EV Hybrid car.
F&Iby StaffJune 15, 2026

New Lifetime Battery F&I Product Meant to Drive Dealer Traffic

EFG Cos. offering is intended to create lifetime auto dealer engagement with customers.

Read More →
Several illustrations of question marks on a surface
F&IJune 10, 2026

The Psychology Behind Menus That Increase Add-On Sales

There is a science to crafting a menu that gives customers confidence in the choices presented, and moving the process outside the F&I office can further boost results.

Read More →
Man holding magnifying glass over sales volume paper.
F&IMay 29, 2026

Why Your F&I PVR Is Misleading You

Here’s a handy checklist of the numbers to track in 2026 instead.

Read More →
Ad Loading...
Photo of woman typing on a laptop as she sits on a couch
F&Iby Hannah MitchellMay 29, 2026

Auto Consumer Anxiety Presents Opportunity

A survey of U.S. drivers found the majority are concerned about finances and the economy, but those fears make many ready to buy vehicle-protection products.

Read More →