Auctioneer Rolls Out AI Recommendations for Car Dealers

KAR Auction Services says system on its marketplace tailors suggestions so dealers buy used cars that sell faster, bring more profit

By Jared Council
Wall Street Journal PRO writer

An auction lane at Kar Auction Services’ Adesa location in Chicago. The company serves as a venue for used-vehicle sales through physical-auction locations and online marketplaces.

Vehicle auctioneer KAR Auction Services Inc. is using an artificial-intelligence-based recommendation engine to show dealers visiting its online marketplace which used cars are likely to sell fastest and generate the highest profit margins.

The Carmel, Ind., company added the feature to its flagship marketplace this year. The recommendation engine analyzes vehicle information, such as condition and mileage; market data, such as which makes and models are popular in a given location; and dealer history, such as which cars have tended to sell quickly at a specific dealership.

Based on those factors, the machine-learning technology comes up with recommendations and explains the decision. For instance, if a black Chevy Blazer is recommended, the system will display as many as 13 contributing factors, such as “Recent success: A similar vehicle has recently moved off your lot, it looks like you sell these well,” or “Pricing: The cost of the vehicle is 84% of the average market list price.”

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