Ask HN: Why do we still buy cars like it's 1995?

I believe it's because used cars aren't commodities, and it's hard to have efficient markets with non-commodities. That's what I think, I didn't do economics. I asked gpt and it (unsurprisingly) agreed:

"Great question. Yes, you can have an efficient market with non-commodities like used cars, but only to a limited extent and under specific conditions. Efficient Market Basics

An efficient market is one where prices fully reflect all available information. This works well with commodities like gold, wheat, or publicly traded stocks because:

    The products are homogeneous (one unit is the same as another).

    Information is widely available and trustworthy.

    There are many buyers and sellers.

Used Cars: A Non-Commodity Example

Used cars are the opposite of commodities in many ways:

    They are heterogeneous (different mileage, wear, accident history, etc.).

    Information is asymmetric — sellers know more than buyers.

    The market is often fragmented.

These traits violate key assumptions of efficient markets, especially the ones about perfect information and substitutability. Can It Approach Efficiency?

Yes, under some conditions:

    Platforms like Carfax, Autotrader, or Carvana reduce information asymmetry by providing standardized inspection reports and history.

    Ratings, reviews, and guarantees help build trust.

    Large-scale data and AI tools can help estimate "fair value" more accurately.

These innovations improve transparency and comparability, pushing the used car market closer to efficiency — but it still won't match the efficiency of stock or commodity markets. Summary

So, an efficient market with non-commodities like used cars is possible in degree, not in kind. The more the market reduces heterogeneity and information gaps, the more efficient it becomes — but perfect efficiency remains out of reach.

Would you like to dive into this from a behavioral, economic theory, or marketplace design angle?"

I don't think it's right that Airbnb solved short term rentals - outside of a few dozens prestige markets that they monitor with humans, it's really a race to the bottom. Reputation at scale remains unsolved, and so it's still a market for lemons.

Are there not dozens of used cars for sale sites when you search, even not including dealers?

You pay for trust. Carmax is as close as you’ll get to optimal from a trust cost perspective for buying or selling a used car, with Carvana a close second.

Most people can't afford to buy a vehicle—new or used—without financing. When selling a used car privately, you're really targeting a specific type of buyer: someone with cash who can pay outright. That's one reason dealerships are so popular for used car purchases—they offer financing options.

Many people also prefer to avoid the hassle of selling privately and instead choose to sell their vehicles to a dealer.

It might sound odd, but buyers often trust dealers more because they believe they’ll have some recourse if something goes wrong with the vehicle. Most don’t have the knowledge or confidence to thoroughly inspect a car themselves.

Personally, I always buy and sell privately. I’m honest with every buyer and confident in my ability to assess a car’s condition. But I know I’m in the minority—probably just 1% of car buyers.

Can I ask what kind of vehicle you were selling? That will also dictate the kind of buyers you're going to get.