Why So Difficult To Buy A Quality Used Car | St. Louis Federal Reserve
Why So Difficult To Buy A Quality Used Car | St. Louis Federal Reserve
Are you in the market for a vehicle? During the 2007-09 recession, new-vehicle sales plunged to their lowest levels in nearly 30 years. They have since fully recovered as people replace their aging vehicles with shiny new cars, trucks, vans, and sport utility vehicles. Prices of new vehicles, however, are at all-time highs, leading many buyers to look for used vehicles. It can be a challenge, though, for buyers to figure out whether they are getting a good deal. The seller generally knows far more about the vehicle. Even with careful examination, the buyer still likely won't know everything the seller knows. When one party knows more about the product than the other party, there is "asymmetric information." In the case of a used car, the seller has more informationโand the advantage. The opposite can also be true in a transactionโthe buyer can have more information and the advantage.