We ran a project for a major second hand car marketplace, where we used IoT solutions to identify find issues in the engine and transmission. The process of evaluating cars is manual and is prone to errors due to lack of training, oversight and plain non-compliance. The companies incur a significant loss due missed inspection defects. With technology the inspection process can be more efficient and objective. Our solutions identified issues in over 50% of vehicles that had issues missed in the first evaluation.
How second hand car marketplaces work
Used car marketplaces enable people to buy and sell used cars easily. There are a number of these companies that do this. The modus operandi of these companies is to buy second hand vehicles in the market from individuals and then sell them to customers or dealers of old vehicles. Most of the vehicles are sold to second hand car dealers who in turn sell them to customers. Ideally the selling price is higher than the cost price, and the difference is the profit. Before buying the vehicle, the vehicles get inspected. The inspection involves checking the exteriors, interiors and assessing the quality of the engine and transmission. The inspection for most vehicles is done by a person at the customer’s location. Expensive vehicles are taken to a workshop for a more exhaustive inspection. Smaller cheaper cars get inspected only at the customers location.
Quite often, the inspector misses a defect in the car. The defect could be in the exterior or something deeper in the engine or transmission. External defects like scratches or dents can be fixed quickly without significant expense. A missed defect in the engine or transmission is much more serious. An engine or transmission defect requires the company or dealer to revalue the car and discount it significantly. This means that the company incurs a loss due to such misses.
As volumes grow higher, second hand marketplaces will have to find to become efficient. They have to find a better way to evaluate their vehicles. They need to keep the costs of inspection low, give best prices in the market and ensure that they can sell the vehicles they buy at a profit. Technology will be at forefront making the evaluation process more objective, reducing manual errors.
Study and Results
We ran a project for one of the largest used car platforms in India. Our solutions for vehicles include methods to read engine data, analyse the different parameters from the on-board computers and find issues. We used an IoT solution to catch problems that were missed in manual inspections. They gave us a few vehicles where the car inspector missed defects in the car and therefore were returned by the dealer to them. All these cars were smaller cars and all have them would have been to devalued significantly incurring a loss.
These are a list of a few vehicle defects and our findings on them. The vehicle inspector identified no issues with these vehicles when it was first inspected. The column for manual inspection has a list of defects identified by the dealer on the vehicles after it was approved by the vehicle inspector. The IoT report identifies an area of issues identified by the IoT solution
Based on the results of the study, we can see that if the vehicle inspector uses the IoT solution while evaluating the vehicle, the number of inspection misses can be reduced by about 50%.
The second hand car market is exploding and eventually companies in the space will have to look at technology to make vehicle inspection easier, cheaper and accurate. Technology will enable that. Our early studies show that technology reduces the probability of critical inspection misses by more than 50%. Further refining of the methods and more detailed analysis will reduce inspection misses even further, improving margins for the companies that incorporate them fastest.