It didn't 'prove' used car markets don't exist, it showed that naive car markets with high amounts of information asymmetry can't exist, and in fact they don't.

It didn't 'prove' used car markets don't exist, it showed that naive car markets with high amounts of information asymmetry can't exist, and in fact they don't. All real used car markets have multiple layers of either testing and warrantying (which solves or reduces the asymmetry to a manageable level), legal remedies (many states have 'lemon laws' that push liability back to the seller), or are filled with sophisticated buyers (e.g. car auctions) who can actually tell which car is a 'lemon' because they bring a trained mechanic who will inspect the car in person.