Illusion of Transparency: How Unverified Vehicle History Reports and Digital Guarantees Cause Consumer Vulnerability

Abstract

Objective: This study examines the influence of perceived risk on consumers' purchasing behavior in Pakistan's online used-car market and investigates the mediating role of consumer trust in the relationship between perceived risk and purchasing behavior.

Design/Methodology/Approach: A quantitative, cross-sectional study approach was used, by utilizing survey data collected from 401 Pakistani online buyers of used cars. A standardized questionnaire with a five-point Likert scale was used to collect the data. The Partial Least Squares Structural Equation Modeling (PLS-SEM) with Smart PLS 4.0 was used to assess the measurement and structural models and test the proposed hypotheses using bootstrap.

Findings: According to the test results, the perceived value of risk has a negative impact on customer buying behavior (β = –0.461, p < 0.001) and considerably lowers customer trust (β = –0.631, p < 0.001). On the other hand, buying behavior is strongly positively impacted by consumer trust (β = 0.417, p < 0.001). Hence the mediation study shows, 36.3% of the overall impact is mediated by consumer trust in the link between perceived risk and buying behavior. The results demonstrate that trust indicates the negative impact of perceived risk, risk still has a significant direct influence on customer behavior.

Practical Implications: Online used-car platforms should strengthen risk-reduction mechanisms through verified vehicle inspections, transparent information disclosure, secure payment systems, and trust-enhancing practices to improve consumer confidence and encourage online purchases.

Originality/Value: This study extends the literature on online consumer behavior by providing empirical evidence from an emerging economy and demonstrating the mediating role of consumer trust in the perceived risk–purchasing behavior relationship within Pakistan's digital used-car marketplace.

Keywords: Perceived Risk; Consumer Trust; Purchasing Behavior; Online Used-Car Platforms; PLS-SEM; Emerging Economy & Pakistan.