How market research helped the European Commission to understand buyers’ experience with second-hand cars
By GfK, a leading worldwide market research company for the European Commission.
European consumers often seem to have unsatisfactory buying experiences with second-hand cars
The European Commission department that specialises in Justice and Consumer Affairs monitors about 50 goods and services markets from a consumer perspective. The second-hand car market has been the lowest performing goods market, the Commission wanted to find out why this was the case.
The project was commissioned by the Consumers, Health, Agriculture and Food Executive Agency (Chafea) on behalf of Directorate-General for Justice and Consumers.
The project took place from June 2013 until November 2014.
Please note that the opinions expressed below are those of the contractor only and do not represent the contracting authority's official position.
Wide range of techniques
GfK used a range of techniques to get a complete view of the second-hand car market across the 28 EU countries, plus Norway and Iceland. Stakeholder consultation and desk research: GfK interviewed EU and national stakeholders involved in the second-hand car market, with experts included representatives from consumer associations, public authorities and industry representatives.
Consumer surveys: GfK performed over 25,000 online interviews with customers from the 30 countries that had purchased a used car from a dealer or auction within the last three years.
Price collection: GfK collected second-hand pricing data across the 30 countries for nine cars. The company’s automotive experts analysed the data to establish how second-hand car pricing differs across Europe.
Mystery shopping: GfK organised 1,200 mystery shopping exercises across the 30 countries to gain more information about dealer practices.
Insights and figures for a fact-based policy-making
The study revealed that many European consumers are preoccupied with price when shopping for used vehicles and do not always do enough pre-purchase checks before committing to a deal. It was discovered that customers should conduct more thoroughly research and check a second-hand car before buying it. The research also indicated that car traders are challenged to be more forthcoming with information if they want to build trust among buyers. Further findings included:
54% of consumers bought their most recent second-hand car from an independent dealership, 42% from a franchise dealership and 4% from an auction. Meanwhile, 4% bought their car from outside their home country. The average second-hand car was 6.2 years old and had travelled 87,000km. The average price across the region was €9,350. The highest average prices were to be found in Scandinavia, Portugal and Luxembourg. Only 5% of traders informed our mystery shoppers about their legal rights around purchasing a second-hand car. 41% experienced a problem with their second-hand car within a year of purchase. Post-purchase troubles were especially high in Eastern Europe, for cars bought from abroad and for cars bought at auction. The average problem costs the buyer more than €500 to resolve.