New pan-European used car grading standard announced

Panellists (l-r): Stuart Coppard, Fran Bleasdale, Gavin Shone and Conor O’Boyle

A new pan-European used car grading system was announced at the latest member meeting of the Vehicle Remarketing Association (VRA) on 26 March.

News of the initiative, which is being created by the Car Remarketing Association of Europe (CARA), was presented by Gavin Shone, head of operations at Openlane.

“Our objective is to create a single grading language across continental Europe. The market is vast, so we need something that is plug-and-play, effective, and usable to encourage adoption as widely as possible.

“The solution we have finalised uses a transparent decision tree and algorithm to remove ambiguous inputs and ensure consistent outcomes. A rules-based approach based on facts enables full automation from standardised inspection inputs and delivers scalability across large inventories and multiple markets.

“Also, we have decided to use two separate grades for the vehicle’s interior and exterior in order to produce a comprehensive picture of the overall condition, rather than trying to arrive at a single grade that covers both.”

The CARA presentation was made as part of a detailed session on vehicle grading, featuring Conor O’Boyle, vice president of growth at TradeBid and ACV Auctions, on the experience Stateside.

“There is no single grading standard in the US, multiple systems co-exist, and several rely heavily on subjective inspector judgment to produce a grade. This can create real frustrations for both buyers and sellers where the same grade can mean different things depending on where and by whom it was assigned.

“At ACV Auctions in the US, we’ve been working to solve this problem for over a decade. Our view has been and remains that the way forward is built on comprehensive, transparent condition data. Rather than reducing a vehicle’s condition to a single score, you give buyers the full picture and let them make their own informed assessment.”

"We go as far as recording the sound of the engine, comparing it against a database of millions of previous inspections, allowing the technology to make a reliable prediction of likely mechanical issues.”

Conor O’Boyle, vice president of growth, TradeBid and ACV Auctions (US) Tweet

More data for buyers

Data also formed part of a grading discussion panel featuring Stuart Coppard, head of inspections excellence, Manheim, and Fran Bleasdale, UK sales director, BCA.

Fran said: “It’s not just about having a consistent and well understood inspection and grading process but also seeking to enrich the level of data and information we supply to our buyers. This enables them to make informed and confident buying decisions, which creates the best levels of performance for our vendors.”

“Battery health checks should additionally form part of this conversation as more electric vehicles enter the market. We’re trialling these at the moment and results so far show batteries are degrading very little over time, giving the buyer and the seller the data they need to ensure well-informed judgements.”

Stuart Coppard, head of inspections excellence, Manheim Tweet

Latest used car and van trends

The meeting also featured an extensive section on the latest trends in the new- and used-car and van markets.

Abi McCabe, national client strategy manager at Autorola UK, said: “Petrol and diesel remain the most stable and predictable parts of the used car market and residual values have normalised at healthy levels. Plug-in hybrids are seen as temporary by the trade and as a stepping stone to EVs by consumers, but are doing well at present.

“EVs remain the most misunderstood part of the market and prospects vary widely between models. Some are liquid while others are much more difficult to sell and are effectively being priced to clear in the used sector.

“The used EV market looks balanced in supply and demand, but that impression is artificial. It appears this way because of price-led correction, rather than organic demand. EV values are being forced down to the point they become liquid.”

Electric van trends

Emily Morgan, commercial vehicle forecast manager at cap hpi, continued the EV theme but concentrated on the van sector: “EV values remain under pressure, and the market still appears to be very much diesel and petrol focused.

“It’s noteworthy that, in the last year, 62% of new models added to the cap hpi light commercial vehicle valuations product were internal combustion engined, despite the Zero Emissions Vehicle Mandate. There remain a whole host of practical issues which can be as simple but significant as how to drive a large EV panel van into a standard-sized charging bay.”

However, Paul Kirby, expert at EV Essentials, struck a more optimistic note: “New entrants such as BYD, Geely and Farizon are all becoming part of the light commercial vehicle market. So far, their approach has been conservative, pricing vans in a non-disruptive manner. However, disruptor products are coming – offering payload, pricing and range designed to make potential buyers think, ‘Why not?’

“It’s not just Chinese manufacturers. Kia has entered the electric van market and is already number three in this sector with a strong product. It looks good, is priced well, and has a seven-year warranty. It shows you can enter the battery electric van market and successfully disrupt it with the right vehicle and proposition.”

The VRA meeting took place at Cox Automotive, Bruntingthorpe, Leicestershire, and was the organisation’s best-attended ever, attracting more than 60 people in person and another 30 online.

Philip Nothard, chair at the VRA, said: “We signed a new agreement committing to closer collaboration with CARA last year. This meeting was one of the first visible signs of that partnership, and prompted some excellent discussions on the future of grading in the UK, Europe and US.”

Grainne van Berkum, board member, CARA, added: “Grading is fundamental to remarketing and we were delighted to be able to announce the results of our work so far in this area, as well as taking part in the informed discussion that followed.”

The next member meeting will be on 14 May at Bruntingthorpe. Further details about attending VRA events can be obtained by emailing info@thevra.co.uk