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The Essentiality of Promoting the Assessment Skills of Used Car’s Conditions

Lin, Jhengyao
Instructor of vehicle techniques
Taipei City Vocational Department Institute

       The Fubon Group has been more focused on business opportunities related to the used car transactions, which are up to 600 thousand vehicles yearly, according to the news dated April 20, 2018. One of its associations, Momo Supply Chain Management, a shopping network, is going to establish the services for the used cars and has formally transcended to the used car market. Consequently, it will become the first company who gets involved the general E commerce platform (Hong, Kaiyin, 2018).

       From 20 years ago the Yulong Group Co., Ltd. and the Hetai Group have transcended to the market for the used cars. Each brand has successively established the used car business identity, which has been authentically certified by the original manufacturer. Until this year there have been at least 10 original brands establishing their used car departments which have been certified by the original manufacturers. From the aspect of the whole year’s transaction data of SAA’s car auctions in 2016, the market size of the used cars came to around NT$180 billion. That is, six hundred thousand cars times three hundred ten thousand New Taiwan Dollars equals to one hundred eighty six billion New Taiwan Dollars. This is one of the main reasons that the original manufacturer gets involved in the used car market.

       As a share of all the auto businesses, the used car market is huge. However in the current phase, there is not a related official policy in this field. The matters of the certification standard about the car conditions and personnel training system are only dependent on the involvement of the manufacturers with their individual advantages, so the market appears in a condition in which a hundred schools of thoughts are in competition. As a result this causes a lack of a consistent standard for the used car market to follow. The authorities have failed to develop a leading position. It all depends on the used car dealerships themselves.

       The used car industry has a unique feature. Its quality can’t have the same consistency as the new car did. The “asymmetric information” is one of the main factors for the product to leave a negative impression on people. In the market, the information about the used car conditions are not disclosed clearly enough. The potential consumer of the used cars would feel some insecurity and have concern about the information on the car’s conditions and prices which are beyond the control of the market.

       Without a normal uniform standard in assessing the quality, the used car dealer can’t offer a standard assessment on the quality of the used car. It’s a hard thing for protecting the consumer in the used car market. Some of the unscrupulous vendors ignore the safety of the consumers. They are profit-oriented and neglect consumer’s rights and interests, to illegally sell the cars put together from parts taken from cars that have been in an accident, sell water-logged and modified cars, etc. The preceding problems have caused the used car market to fail and to not be normally operated and developed.

       One of the reasons that the information for used cars is not thoroughly disclosed can be traced back to a bad ruling on the compensation for a car in an accident case. Consequently for covering the loss, the party who has had his car damaged in an accident will try to conceal the car conditions during a transaction in the used car market.

       In Japan, the damage compensation to the car which has been in an accident is calculated as follows: Damage compensation amount = repairing fee + evaluated loss + fee for using a substitute car + others (Cian, Yebo 2014).

       In Taiwan now the assessment for compensation for a car in a traffic accident is only based on repairing the damage of the car body. It is in accordance with the regulations of the “Table of Depreciation Rates of Fixed Assets” and the “Table of Service Life of Fixed Assets” prescribed by the Ministry of Finance R.O.C. This is quite different from the formula of “depreciation rate for the life of the car” applied by the used car market. Therefore to reduce the depreciation of value, the owner of the damaged car intentionally conceals car conditions when selling it. To solve this problem, this year the author of this article has compiled an article titled “Constructing a Model on the Analysis of the Vehicle Value Loss Assessment for Vehicle Accident Compensation”. The judicial authorities are expected to pay attention to this issue.

       In response to the lack of a consistent standard of quality assessment in the used car market, the author working for the Taipei City Vocational Department Institute, encouraged the Institute to initially open a class, “Assessment of the Used Car’s Conditions”. Its aim is to educate new experts dedicated to this field through the involvement of the government, and to supply the used car market with person of outstanding talent through correct management concepts and assessment skills.

       The vehicle technical course of the Taipei City Vocational Department Institute is relative to the core skills for the industry. To meet the demands of the human resources of the vehicle market, a series of new courses related to the vehicle skills are constantly offered. For example, the subject of CAN BUS and the hybrid car has been adopted into the training courses. 

       Soon we are going to recruit students for the class “Assessment Skills of Used Car’s Conditions”. Recruiting for the class starts on June 25, and the class begins in September. The above class is introduced by the Taipei City Vocational Department Institute of the Department of Labor, Taipei City Government, and it aims to make our used car market more thorough. Until now this is the first and only course about “Assessment Skills of Used Car’s Conditions” officially held by our government.

​        Our faculty members are all very outstanding. In addition to our senior academic instructors for vehicle techniques, some of the senior associates dealing with the used car industry are hired to teach as well. Whoever is interested in the program, go to the Taipei City Vocational Institute’s website at https://www.tvdi.gov.taipei for the related information.