The used vehicle market could be improved
Today, November 20, 2017, we put a stake on the ground. We the folks at Qmarketz.com commit to make a better, more robust Philippine vehicle market by providing valuable information which leads to transparency and trust to and from all the players in the industry – the buyers, the sellers, the repair shops, insurance companies, publications – everyone.
Why are we doing this? Well, we asked people about the current state of the state of the Philippine vehicle market, and here are a few uneasy facts:
- Filipinos don’t trust each other when buying a used car, rating used car dealers a 2.69 our of 5 and private car sellers only slightly higher at 3.38. By Filipino standards, that’s pretty bad.
- We Filipinos still consider car ownership today highly important (4.7 out of 5), yet half the people we spoke with wouldn’t think about buying a second-hand car because they don’t want the risks, headaches (and heartaches) associated with buying used cars, even knowing that buying new comes with a significant price premium.
- Almost all of those people we spoke with didn’t know what a “fair” price for a car was, and most were scared they’d sell too cheap or buy too high.
- Nearly everyone felt they cannot get enough information about used cars right now.
The Philippine used vehicle market seems to be broken, and it’s not at all surprising. Everyone is scared. No one is trading. Buyers are afraid that they’d buy too high or worse, that their expensive purchase will break down the week after, necessitating repairs not budgeted for, especially since they used up most of their money on the car in the first place. “Nabaha ba ‘yan?” “Smuggled ba?” “RFS po?” These are some questions going through buyers’ heads while they think about their biggest purchasing decision for the next few years. Sellers (dealers or private individuals) are only a little bit better off – they’re still worried whether they’ll sell too low, but at least they know the entire history of the car, and only their personal ethics will dictate whether to tell the whole truth, or “window-dress” a little bit. Banks and insurance companies probably look at the whole market a bit leery, so they’ll withhold financing or charge higher premiums for insurance to the new owner.
At the heart of the market breakdown is a stark, market-wide information drought, which QmarketZ would like to resolve. The Philippines doesn’t have a Kelley Blue Book that the US has, which tells the general market value of a car per region, based on age, mileage and other key factors. We don’t have a CarFax that tells the history of a car – when it was bought, sold, serviced, flooded (if at all) which gives the buyer a better idea of what the car’s been through, and is a valuable negotiation point to determine the price of a car. Importantly, the government and insurance industry are in on the ecosystem: they use Carfax information and provide information back, strengthening the symbiotic relationship. Sadly, even the LTO’s 2600 text alerts has received complaints that cars reported as being carnapped don’t necessarily always reflect in the Stradcom-designed system. In fact, news is that LTO and Stradcom (the guys who gave us 30-minute license cards) are parting ways following billion peso fee disputes.
This information drought manifests itself in this sluggish market:
- Private individuals who could sell older cars to buy newer ones forego that opportunity because it’s too much of a hassle
- People who would otherwise buy used cars opt to suffer a bit more, save their money and buy new – or never buy at all
- Unscrupulous dealers continue plying their broken wares, passing them off as excellent specimens, reinforcing the stereotype while at the same time
- Giving the honest, above-board dealers a bad name and perhaps even forcing them out of business.
Qmarketz would like to help out a bit. Soon. Hold on to your horsepowers.
Learn how to buy a used car with this simple guide: Buying Used Cars – A Simple Guide
Know the most fuel-efficient cars of 2017: The most fuel-efficient cars of 2017