A recent AppraisalPRO’s nationwide survey found that consumers are not always being forthright about the conditions of the car before they sell it.
The report disclosed that nearly one in five American car owners admit the last car they sold had serious unresolved mechanical problems; however, one in six admit not disclosing that information to prospective buyers.
Conducted in early September, the survey of 500 Americans who had bought or sold a vehicle through a dealership since 2019 highlights the high cost of hidden mechanical failures, rampant mistrust among buyers, and growing consumer demand for transparency in the used car marketplace, according to AppraisalPRO officials.
Survey Conforms Dealer Suspicions
“While many in and outside of the industry have long suspected the extent of hidden mechanical issues in used cars and trade-ins, our survey quantifies what has been conjecture,” said AppraisalPRO’s Cory Hewett.
“More than 15 percent of sellers admit hiding their car’s problems, leaving buyers with huge hidden costs and mistrust – which ultimately hurts both consumers and dealers.”
AppraisalPRO, a recently launched FIXD Automotive brand, leverages big data and artificial intelligence (AI) to empower new and used car dealers to spot lemons, devalue trades and win more deals. Launched in June 2024 by FIXD Founders John Gattuso and Frederick Grimm, AppraisalPRO utilizes its parent company’s detailed scans of five million vehicles to provide U.S.-based dealers with immediate, precise repair cost estimates for thousands of mechanical defects, uniquely tailored to the make, model, year, trim and geographic location of used vehicles.
Its free sensor and subscription-based OBD2 software system help dealers identify hidden reconditioning needs to optimize trade-in values, increase profitability, and ensure fair deals for customers.
Key Findings
In early September 2024, AppraisalPRO polled 500 US-based respondents who had all bought or sold a car through a dealership since 2019. Of the respondents, 96 percent had bought a vehicle over the last five years, and 60 percent had sold, at least, one car during that time period. More than three in four sold their last vehicle to a dealer; and more than 90 percent bought their last car from a dealership.
Among the results AppraisalPRO executives highlighted include:
- Buyer concerns: Nearly one in three (32 percent) respondents who had purchased a car since 2019 acknowledged they were concerned the seller was “hiding important mechanical problems.”
- Hidden Costs: More than 27 percent reported buying a car and discovering “serious” mechanical problems within the first six months. And among these unfortunate buyers, one in four were stuck with problems that cost them more than $2,000.
- Concealing problems: 18 percents aid the last car they sold had “significant unresolved mechanical problems;” among these sellers, 16 percent admitted they did not disclose those problems to prospective buyers. 70 percent said they disclosed all their last car’s problems to buyers.
Message to Dealers
Additionally, car buyers trust dealerships over private sellers by a 63-point margin (68 percent vs five percent). However, 37 percent of respondents have, at some point, decided against purchasing from a dealership due to concerns about the seller’s honesty. And 65 percent of consumers are willing to pay more for a vehicle with an OBD2 diagnostic report; 84 percent of car sellers should be required to provide diagnostic reports to prospective buyers; and 94 percent said knowing a car passed a diagnostic test would influence their purchasing decision.
AppraisalPRO dealership manager Leslye Guthrie stressed the survey sends a clear signal to American dealers.
“Used auto buyers are concerned enough about transparency that they’re willing to pay for it,” Guthrie said. “If dealers want to protect themselves against buying trade-ins with massive hidden mechanical problems and also demonstrate the health of the cars on their lots to consumers, they need to leverage OBD2 diagnostic technology.”
