Online traders tap into used car market and improve transparency

He said the Chinese used car market has huge potential and good opportunities in the entire value chain, as 50 percent of auto sales in China are new cars, while only 20 percent are new in the United States.

"The used cars and new car ratio is 0.25 in China, significantly low when comparing with 2.8 in the US," he said. That means only one in five cars in China is a used car, but nearly four in five cars in the US are used cars.

Currently in China, there is no well-known trustworthy third party assessment similar to that of Autocheck in the US, so all secondhand car deals relied on the buyers' judgement and professional sellers can exert themselves by hiding unfavorable information, leaving amateur buyers to figure out if they are getting a good deal.

Used car markets in developed Western countries have trustworthy third party assessment companies and price comparison websites. Assessment reports give ratings and reports are on a neutral basis and trusted by both parties in the deal.

Hecker said, "There are companies initiating the third party car assessment service in China. It will examine a used car and give a certificate."

"Different from the independent used car dealers, the carmakers trade used cars to support the brand as it maintains the customers from switching to other brands," he said.

Used car online trading platforms are not new in China. GM launched its used car website in 2002, BMW in 2003 and Audi in 2009.

Co-founder and vice-president of renrenche.com Du Xiyong said, "Each of our assessors has portable devices and uses specialized software in evaluations. So we boosted the effectiveness two or three times that of the traditional ways in every sections of the procedure. All in all, our system has tens of, even a hundred, times higher effectiveness."

"We only do the top car business, only superb and excellent conditions are accepted," he added.

Hecker said, "The key is the customer service. The internet technologies help the trading platforms serve more customers, bring more transparency to the deals, and make more precise evaluations."