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Valuations reach 98% accuracy.

We are seeing a growth in competitors claiming to use AI to calculate used vehicle retail valuations.

While some may be using a ”version’ of AI most of these techniques will be machine learning using a large database of car data to group similar data and produce a valuation. Claims of 80% accuracy seem, to us, to be weak and in no way will these challenge the likes of CAP or Glass except by being cheaper and sold as more ‘high tech’.

Our valuations are higher accuracy and based on the largest data set in the UK.

So how is AI helping Marketcheck with used car valuations?

AI Integration in Car Valuation Models

In the UK’s used car market, AI algorithms have brought a significant change to how car valuations are determined.

Our models use advanced machine learning techniques to process large datasets, including car specifics and broader market trends. They excel in identifying subtle patterns, such as seasonal price changes and economic impacts on car values, that are often missed by traditional methods or teams without the knowledge, skills or manpower to really focus on AI

Marketcheck have a dedicated team who who work on this and have, even in the last 60 days, increased the efficiency and accuracy of our models by 3X.

Unlike older valuation approaches that rely on manual inputs, AI systems are dynamic and adapt to the latest market conditions, which improves competitive advantage for the best adopters in the sector.

Data Specificity

The accuracy of AI in car valuations is largely due to the depth of data considered. Marketcheck valuations used data collected from a sample set of 5m vehicles which have been for sale in the last two years in the UK across 10,000 car dealers.

Beyond basic information like make, model, and age, we also analyse detailed car specifications, including engine size, fuel type, and trim levels. We factor in additional features that owners might have chosen, like advanced technology packages and safety features.

Marketcheck now use trim level spec for 96% (+) of cars and are now including optional level spec and the MRP of that option to help the models price more accurately.

This approach allows Marketcheck AI to provide valuations that reflect the true market value of a car, accounting for individual characteristics that generic, under-developed models might miss.

Market Impact of AI on used car valuations

The improved accuracy of AI car valuations is reshaping the UK’s used car market.

Sellers can price their vehicles more competitively and transparently, increasing their chances of a successful sale. Buyers benefit from knowing the fair market value, reducing the likelihood of overpayment. However, as AI matures this will become more normal – some caution should still be taken around the pricing of edge case cars where the training data is lacking such as supercars or rarer, older cars.

The industry as a whole gains from a more efficient and trustworthy market, with dealers managing inventories more effectively and financial institutions offering more accurate financing and insurance options.

Challenges and Limitations of AI in car valuations

Integrating AI into car valuations comes with challenges.

AI models are dependent on the quality of their training data; inaccuracies or biases in the data can lead to flawed valuations.

Continuous updates and monitoring of these models are essential for maintaining accuracy.

Additionally, there’s a need to overcome scepticism from traditionalists in the industry, which involves clearly demonstrating the benefits of AI-driven valuations.

If you would like to know more or walk through our processes of data analysis and implemting AI, get in touch.