Information asymmetry and the “market of lemons”
autoDNA has prepared an extensive report on the transparency of the automotive market.
“Information asymmetry is a condition under which one business party has a significant advantage over the other one they are dealing with, i.e. they possess more information regarding the subject of the transaction and can use it to their benefit at the expense of the other party.”
Quoted above is a fragment of “Second hand car purchase roulette is over”: a report published by autoDNA. The report provides an overview of the way automotive market is turning towards greater transparency.
Apart from the purchase and sales offers, the report analyses the behaviours of its participants in detail. It touches upon such important phenomena as the information asymmetry and lemon cars. A line is drawn between the professional sales of second-hand vehicles and the grey market in which an average seller cannot be trusted. While at first sight, the questions raised in the report seem to be very specific to the automotive market, the actual phenomena we examine are of a more universal character. What we describe is a global problem, and the society is still lacking awareness of it.
Our task is to help build positive relations in the automotive market. We have taken into account different social aspects of the market and gathered feedback from its many important participants. We are proud to present the most valuable results of the research carried out on a representative sample of the Polish citizens with the support of the SW Research company. “As many as 70% of buyers experienced deliberate manipulation in their relations with the vehicle seller. In the best possible scenario, they only learnt part of the information regarding the car in which they were interested; in the worst cases, they were simply lied to. Ca. 12% of the Polish drivers came across an offer with an incorrect of falsified VIN number. What is even more concerning is the fact that 18% of those who were looking for a vehicle on-line found it difficult to even obtain the VIN number from the seller, who were clearly trying to hide the vehicle history from them,” says Mariusz Sawuła, the CEO of autoDNA. How long will we be forced to face such problems? It turns out that the solution is a simple 17-digit key: the VIN number assigned to every vehicle in the world. The VIN is unique for every vehicle; it’s like the human DNA. If a purchase and sales agreement is supported by a report in which the VIN is decoded, then it can be considered transparent.
The results gathered by SW Research as part of our project are showing that our society is still lacking awareness of the VIN numbers and their importance. Buyers who are not aware of their rights find it difficult to demand such information in every offer. This is why we decided to prepare a report that will demonstrate a comprehensive approach to the problem. We believe that it will help both the buyers and the sellers work effectively and transparently. This is the mission of the autoDNA brand. We expect our activity to help show how trustworthy the users of our services are. We serve dealers of new and second-hand vehicles who validate their offers with the use of autoDNA reports and increase the residual value of vehicles with verified history.
Every buyer can access the Central Vehicle Register report free of charge at www.historiapojazdu.gov.pl. The website contains data related to vehicles registered in Poland. If you have a trusted profile, you can also obtain information on vehicles from certain European countries such as Germany, France, Belgium, the Netherlands and Sweden, as well as the USA and Canada. If you’re looking for a more extensive database, damage and repair history, the available vehicle photos and odometer readings, you are welcome to see what vehicle history reports we have prepared for you at www.autoDNA.com.
Roulette is over! with autoDNA
The full report is available free of charge here
autoDNA is the leading provider of services of checking vehicle history online and free VIN lookup. Based on your VIN number, with autoDNA you can verify vehicle history before making a purchase. In many cases, VIN check may prevent you from incurring unwanted additional costs associated with purchasing a vehicle with an unknown or salvage past.
