Eliciting consumer preferences for used vehicle e-commerce platforms: A discrete choice experiment approach

Abstract

The market for used vehicles has grown rapidly worldwide. However, information asymmetries and a lack of quality guarantees negatively influence consumer participation in this market. In this study, we conduct an online survey with discrete choice experiments to elicit consumer preferences for e-commerce platforms aimed at facilitating used vehicle transactions in China. Our experimental design includes a suite of attributes that are representative of current e-commerce platforms for used vehicles, covering the type of sellers, the provision of multiple essential services (e.g., loan, insurance, and inspection), and service fees charged by platforms when transactions occur. Estimating mixed logit models using our survey data, we find that providing information on the available services alone does not significantly affect consumers' choice of e-commerce platforms for used vehicles. However, respondents substantially value additional services offered by the platform and are willing to pay extra service fees, especially for inspection services. Our results provide new evidence on how consumers perceive e-commerce platforms for used vehicles and highlight the importance of inspections in consumers’ decisions on purchasing used vehicles through e-commerce platforms.