Bad testimony for second hand car market

3/18/2015

The consumers trust in the market for second hand cars is very low. For the third year in a row, this industry has received the lowest score among all 21 goods markets within the EU. All according to the Consumer Markets Scoreboard, an annual evaluation of the European Commission. 

The second hand car market shows deficiencies especially regarding trust, comparability and rate of problems appearing after purchase. 

Due to these bad results, the European Commission decided to conduct an in-depth market study regarding the second hand car market. The supplemental study covers independent dealerships as well as franchise dealerships and auctions. Private sellers were not considered in the study. 

Discouraging findings in the study

The rate of problems that appear within a year after purchase of the car, were one of the findings. More than 40 percent of the participants in the study stated to have experienced at least one problem within the first year of buying a second hand car.

25 percent of the consumers in the study revealed that they also experienced unfair commercial practices during the purchase process. The most common practices were "hidden defects, cover-up or falsifications" (11 percent) and "misleading or omitted information" (9 percent).

The results of the in-depth market study gives somewhat of an explanation to the low trust that consumers have in the second hand car market, according to the Commission.

A knowledge imbalance

The study points out that the second hand car market is dominated by a knowledge imbalance. This makes it very difficult, or even impossible, for consumers to verify the information given by the trader.

It is therefore important to improve the knowledge of consumers and develop unified and transparent standards for the market, the Commission states. Quality labels which are provided by independent third parties and brochures of automobile clubs, are examples reaching this goal.

For full access to the study, please visit the website of the European Commission.