I don't think that's wrong, but I have another suggestion: Car prices may be subject to a variation of Goodhart's Law. Defects may not be that likely in used cars, but attempting to act as though they are not likely would create incentives that would make them become likely.
This might require precommitment or superrationality on the part of the consumers, but a lot of "irrational" consumer behavior can be modelled as rational precommitment, even if the consumer doesn't consciously realize that's what it is.
That's a very interesting idea. I'm pretty sure it's too sophisticated to be consciously part of the reasoning of more than a tiny fraction of car buyers, so if it's an important part of the explanation it must be (as you suggest) unconscious -- presumably as a result of some general-purpose unconscious tendency to over-penalize risks of that general sort. This suggests some interesting psychology experiments; I wonder whether they've been done.
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