"The Market for 'Lemons': Quality Uncertainty and the Market Mechanism" is a widely cited seminal paper in the field of economics which explores the concept of asymmetric information in markets. The paper was written in 1970 by George Akerlof and published in the Quarterly Journal of Economics. The paper's findings have since been applied to many other types of markets. However, Akerlof's research focused solely on the market for used cars.
A grey market or dark market is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market products are products traded outside the authorized manufacturer's channel.
In the United States, a car dealership is a business that sells cars. A car dealership can either be a franchised dealership selling new and used cars, or a used car dealership, selling only used cars. In most cases, dealerships provide car maintenance and repair services as well as trade-in, leasing, and financing options for customers.
Grey import vehicles are new or used motor vehicles and motorcycles legally imported from another country through channels other than the maker's official distribution system or a third-party channel officially authorized by the manufacturer. The synonymous term parallel import is sometimes substituted.
An extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty on new items. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. Extended warranties cost extra and for a percentage of the item's retail price. Occasionally, some extended warranties that are purchased for multiple years state in writing that during the first year, the consumer must still deal with the manufacturer in the occurrence of malfunction. Thus, what is often promoted as a five-year extended guarantee, for example, is actually only a four-year guarantee.
A knock-down kit is a collection of parts required to assemble a product. The parts are typically manufactured in one country or region, and then exported to another country or region for final assembly.
A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, and intellectual property.
CARFAX, Inc. is an American company that provides vehicle data to individuals and businesses. Its most well-known product is the CARFAX Vehicle History Report. Their other products include vehicle listings, car valuation, and buying and maintenance advice.
In American English, a lemon is a vehicle that turns out to have several manufacturing issues affecting its safety, value or utility. Any vehicle with such severe issues may be termed a lemon, and by extension, so may any product with flaws too great or severe to serve its purpose.
A car dealership, or car dealer, is a business that sells new or used cars, at the retail level, based on a dealership contract with an automaker or its sales subsidiary. Car dealerships also often sell spare parts and automotive maintenance services.
Since 2009, the United States is home to the second largest passenger vehicle market of any country in the world, second to China. Overall, there were an estimated 263.6 million registered vehicles in the United States in 2015, most of which were passenger vehicles. This number, along with the average age of vehicles, has increased steadily since 1960. The United States is also home to three large vehicle manufacturers: General Motors, Ford Motor Company, and Chrysler, which have historically been referred to as the "Big Three".
In North America, a salvage title is a form of vehicle title branding, which notes that the vehicle has been damaged and/or deemed a total loss by an insurance company that paid a claim on it. The criteria for determining when a salvage title is issued differ considerably by each state, province or territory. In a minority of states and Canadian provinces, regulations require a salvage title for stolen or vandalized vehicles which are not recovered by police within 21 days. In such cases insurance companies declare a vehicle total loss and pay off the previous owner; but, in others, it is issued only for losses due to damage. Under some circumstances, a salvage title denotation may be removed or replaced with a Rebuilt Salvage designation; and cars imported to, or exported from, the United States may be issued a clean title regardless of history.
In Singapore, cars and other vehicles drive on the left side of the road, as in neighbouring Malaysia, due to its British colonial history. As a result, most vehicles are right-hand drive. However, exemptions have been made to allow foreign vehicles and construction machineries to utilise the roadspace of Singapore. As such, vehicles with left hand drive configurations are required to either be driven with a sign indicating "LEFT-HAND-DRIVE" or towed.
Odometer fraud, also referred to as "busting miles" or "clocking", is the illegal practice of rolling back odometers to make it appear that vehicles have lower mileage than they actually do. Odometer fraud occurs when the seller of a vehicle falsely represents the actual mileage of a vehicle to the buyer.
Vehicle leasing is the leasing of a motor vehicle for a fixed period of time at an agreed amount of money for the lease. It is commonly offered by dealers as an alternative to vehicle purchase but is widely used by businesses as a method of acquiring vehicles for business, without the usually needed cash outlay. The key difference in a lease is that after the primary term the vehicle has to either be returned to the leasing company or purchased for the residual value.
The Retail Motor Industry Federation (RMI) represents the interests of motor industry operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. It does not represent businesses in Scotland, which are represented by the independent Scottish Motor Trade Association.
Auto auctions are a method of selling vehicles based on an auction system. Auto auctions can be found in most countries and are usually exclusive to licensed automobile dealers. In a few countries, such as Japan, auto auctions are well known and used by most residents.
The electric car company Tesla, Inc. has faced dealership disputes in several U.S. states as a result of local laws. In the United States, direct manufacturer auto sales are prohibited in many states by franchise laws requiring that new cars be sold only by independent dealers.
Chinese used vehicle exporting is a grey market international trade involving the export of used cars and other vehicles from China to other markets around the world. With 300 million cars in China, Chinese vehicles are now entering the used vehicle market overseas to boost demand for the domestic market.
The automotive industry in the Philippines is one of the largest in the Asia-Pacific region, with approximately 441.4 thousand vehicles sold in 2023. Most of the vehicles sold and built in the Philippines are from foreign brands. For the most part, the Philippines is dominated by Japanese automobile manufacturers like most of its ASEAN neighbors. The automobile production in the country is covered under the Philippine Motor Vehicle Development Program implemented by the Board of Investments. In addition, there are also a small number of independent firms who assemble and fabricate jeepneys and other similar vehicles, using surplus engines and drivetrain parts mostly from Japan.
