If you’re in the market for a second-hand car, you’re probably well aware already that all is often not what it seems. The problem in the used-car market is one of lopsided knowledge. The person selling the car knows exactly what condition the car is in, but it’s hard for the buyer to know. It’s simply not obvious just from looking at the car. Often you need a specialist mechanic to come along and tell you whether the car is roadworthy or not. There are benefits to this of course. The price of second-hand cars tends to be very low, especially when you consider how much many second-hand cars cost when they were new. But this price is often just a reflection of the fact that people are unwilling to buy second-hand cars unless they’re cheap. That’s because they never know whether something will go wrong.
