Bangernomics and asymmetric information

Another item from the Today programme relating to information was about MOT failure rates for cars and small vans, which have been published for the first time following a Freedom of Information (FoI) request by the BBC. Martin Rosenbaum, the BBC’s Freedom of Information expert, and James Ruppert, special correspondent for Autocar magazine and author of ‘Bangernomics’ discussed the data reluctantly published by the Vehicle and Operator Services Agency (VOSA). The agency had previously resisted publishing the data, saying it might be misleading – and I should think that it is likely to have an effect on the second-hand values of those models appearing at the top and bottom of the list. It may go some way toward balancing out asymmetric information in the market for second-hand vehicles, where the seller has more information than the buyer, thus distorting the price that they might arrive at between them for the vehicle.

The data relates to MOT tests carried out in 2007 and is available on the VOSA website as a PDF document consisting of 1,200 pages. However data for the most popular models of cars and vans has been converted into an excel spreadsheet by Martin Rosenbaum and made available on his Open Secrets blog. He comments that there are some clear patterns, with some Japanese models doing very well, and also Ford Fiestas and VW Polos.

At the other end of the scale the Renault Megane had a failure rate of 28.1% while the Ford Transit experienced a 26.3% failure rate. Vans and fleet typical business fleet vehicles generally do poorly – in the radio interview Rosenbaum pointed out that vehicles which are working resources (rather than family transport) are more likely to be used harder and to spend less time off the road for servicing, because of the opportunity cost to the business which cannot carry out its normal work without the vehicle. VOSA has said it will publish statistics for 2008 and 2009 later this year, and then each year in the future. The interview is available on the Today website here for the next 7 days, and a text article with some more analysis of the figures, as well as access to the report on Open Secrets, is here.