The efficiency of used vehicle markets: the case of technological obsolescence and differential repair records

This paper examines the effect of technological oboslescence, differential maintanance expenditures, and differential fuel efficiencies on the depreciated value of automobiles. Our results support the widely held belief that used vehicle markets are efficient. We show that the significant decline in the depreciated values of used automobiles is predominantly due to age. We also conclude that technological obsolescence causes a once-and-for-all decrease in the depreciated value of used automobiles, that for imported vehicle lines, differential maintanance expenditures affect depreciated value and, that for domestic vehicle lines, differential fuel efficiencies impact depreciated value.