Blog
The bitter taste of buying a lemon
22nd March 2010
One in five of the 3.6 million people buying a secondhand car from a dealer each year experienced a problem according to a new report from the Office of Fair Trading. The report is fresh evidence of the asymmetric information associated with the used car market. Mo’s recent superb blog on information failure is a must-read on this topic! Consumers who end up purchasing a lemon spend an estimated £425 each, or £85 million per year in total, fixing unresolved faults that are the dealer’s obligation to correct.
More here from the OFT: Second hand car dealers must comply with law or face action, OFT states
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.