Can AI help me buy used cars? We put it to the test in a car-buying face-off

  • We put AI to the test and try to buy some cars in online auctions with its help
  • ChatGPT is pitched against a human with a laptop as we try to work out what to buy
  • Latest episode of the AI Car Dealership Project can be watched above 

Time 7:01 am, February 3, 2024

You know better than I do that selling cars is more about buying them than it is convincing someone your car is right for them – but can AI help me?

I’ve quickly realised that trying to run a used car business is about hours and hours spent looking at cars in online auctions – such as Carwow and Motorway – or actually attending physical sales.

While I haven’t yet spent any time in the auction lanes myself just yet – that’s soon to come – what I have done is bid on lots of cars in online sales.

I have found the end process pretty simple. You look at the pictures, check the history, work out your costs and bid accordingly, all with your preferred margin factored in.

The harder bit is identifying the cars I want to buy the first place. Unlike every other car dealer, I have very little historic knowledge of what sells and what doesn’t – because I’ve never actually done it. So, to stock my business, I’m trying to use ‘the data’.

That data mostly revolves around Auto Trader’s Retail Rating – a score it gives used cars to show dealers how desirable they are. Marked from 0-100, the higher the score, the theory is the better car it is to stock.

Well, that’s the theory at least. I know there are lots of cars that fall outside of those high ratings that are still great cars to sell, but my problem is I just don’t know what they are… yet.

Auto Trader also gives its clients – of which I am now one – access to lots of other market metrics, including the demand for that particular model and projected days to sell.

I’ve been using all this to help me work out what to buy and sell myself. I asked my account managers to help me identify the models that fit my buying profile on auction websites and they explained they had a bulk checking tool – a paid-for upgrade, of course – that would allow me to do it.

So it’s armed with this data that I have been cutting down auction lists that number many hundreds of cars to the few I want to buy. Now, I get this isn’t the normal way to do it, but without years of battle-hardened gut feeling to fall back on, it’s the bet I’ve got.

The process takes time to do and I’ve long argued with my esteemed colleague Jon Reay that AI should be doing it for us. So, in this week’s video we put it to the test.

Jon and I both get the same auction lists, cross-referenced with the same Retail Rating data from Auto Trader, and attempt to cut down the cars to a hit list. I try to do it with AI while Jon uses his laptop… and his brain.

What I really want is for AI to do this process for me automatically every day with every car auction list that’s out there. I want AI to take a feed of them, apply my buying parameters – which will of course be different to yours – and then serve me up a curated list of cars I should be looking at in more detail every morning. That would save me hours.

The problem is, right now that’s not possible. That’s not to say I’m not trying to find a way to do it, though.

The last part of the buying process – the sense check – is very hard to replicate with AI. You have to interrogate the listings, made by consumers who really just want to get the best price for their car and often omit, or ‘forget’, vital information.

I find it very frustrating buying cars that are advertised with full history – or ‘part’ – only to find out when it comes to completing the sale that full really means none, or ‘part’ is a dog-eared receipt for an oil filter from the seller’s mate Dave. 

I appreciate these sites are dealing with consumers whose idea of ‘perfect’ is very different to ours. And for the sites it’s a toss-up between asking for all the information and putting off consumers from uploading their cars, to giving dealers the information they need to make an informed bid.

I’ve fed back my thoughts on this to the teams at the relevant online auctions because, if I find it frustrating, I am sure you do too. 

That being said, there are some good cars to be found, but it’s that final part of the jigsaw – looking at the pictures and guessing prep costs, working out just how bad that scratch or kerbed alloy wheel is – that a human is vital for.

ChatGPT ‘help’

We’re using ChatGPT to help across the business, but I’m rapidly finding what I really want AI to do and what it can actually achieve are two very different things.

I find it frustrating that it can’t remember what I’ve asked of it before. It struggles to complete tasks I’ve shown it how to do previously and can’t really be trained. Well, ChatGPT can’t, any way.

What I really want is a digital AI apprentice for my business. One I can invest time and effort into showing it where I want help. Talking to customers, keeping customers updated, sending them documents, filling in forms and records in the DealerKit DMS – and buying cars. None of this it can do very well, just yet. 

It might look like it can, but I want an AI system to learn about the way I do things, the way I want it to talk to customers and what cars I want to buy. As I invest more time and effort into showing it what I want, I need it to get smarter and start to flourish – just like a human apprentice would.

I’ve had some interesting conversations with lots of AI experts in the automotive world and none of them currently offer a system that does what I want. But I think I might have piqued enough interest with some to get them to at least help me try.

The advantage I have with this business is that I have never done it before. I don’t do stuff because it’s the way it has always been done and I am questioning why I’m doing everything the way I’m being told to do it – that might be the only way to advertise cars or deal with the paperwork, but it doesn’t mean it always has to be that way, and maybe AI can help.

While you’ll see in this week’s video I found AI a little frustrating in its ability, or not, to help me buy cars, it will come as some welcome relief to many that a human with a laptop was far better at it. But there were some glimmers of hope – it did some of the work before giving up and going on an extended virtual lunch break.

If anything, this attempt to set up a used car dealership with the help of AI is turning out to be an interesting experiment. Whether it will actually help make car dealers’ lives easier in the future remains to be seen so far.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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