Cox Automotive Inc. said it has developed an artificial intelligence-based e-commerce platform designed to give used car buyers a clear understanding of their costs early in the sales process.
Cox Automotive, a subsidiary of Atlanta-based media, communications and auto conglomerate Cox Enterprises Inc., said the platform features an AI-based payment calculator that gives customers more accurate estimates from the start, so there are fewer surprises at the end.
Cox said it developed the platform in consultation with Penske Automotive Grouphandjob
Joe owns CarShop, a used car seller that offers vehicles online and in their stores. Penske said it has started using Cox’s Essential Commerce platform, which was introduced in late July. Cox plans to roll out the platform to other used car sellers later this year.
Penske, the first user of the system, declined to say how many shoppers have tried the platform. Last year, Penske’s CarShop sold about 53,000 vehicles and generated nearly $1 billion in revenue.
Penske previously used another e-commerce platform that allowed customers to complete transactions online, according to Michael Kabkennell, vice president of retail strategy at Penske, which is based in Bloomfield Hills, Mich.
According to Penske, the older platform, which declined to be identified, gave customers a general idea of what they could afford, but it didn’t allow shoppers to see financing options for specific vehicles, and didn’t make it clear to customers. Wasn’t thinking. According to Mr. Kabkennel, what will be their payment until the final credit approval is received at the end of the sales process.
“This capability, this AI, allows us to put financing at the front of the process,” he said.
Cox is not the only company that has applied advanced technology to the hot market of used cars. online car seller caravan Co.
Said said it is using AI and other forms of data analysis to provide customers with real-time trade-in assessments, financing options and pricing on extended service contracts, which all help buyers to calculate their monthly loan payments. can provide with. on a specific vehicle. The technology is proprietary and only offered at Carvana, which had $5.59 billion in online revenue in 2020.
Cox is making its e-commerce platform available to a range of used car companies. John Lohr, managing director of automotive and industrial practice at consulting firm AlixPartners LLP, said many used-car dealers lag behind when it comes to technology implementation.
“The goal is to be able to truly transform the industry as a whole,” said Kelly Mulroney, senior vice president of product and engineering at Cox Automotive.
According to Penske’s Mr. Kabkennel, online sales platforms typically provide buyers with a loan pre-approval that gives an estimate of how much money the buyer is able to borrow. Those estimates can be rough, because they typically don’t take into account a variety of variables, such as whether the buyer wants an extended warranty, he said.
The Cox system allows car buyers to more accurately see what they would pay for a specific vehicle, taking into account such variables, he said. He said that this platform allows a customer to get the financial details on multiple vehicles simultaneously.
The platform can adjust financing terms on the fly as buyers change their preferences such as the amount of down payment they want to make, he said.
For example, a buyer who has good credit might propose a $1,000 down payment on a 2020 Nissan Leaf with a price tag of $28,796. In that scenario, the monthly payment on the 60-month loan would be $569, according to the system. If the buyer decides to make a $2,000 down payment, the system will recalculate the monthly payment as $551.
According to Cox, the system uses machine learning, a form of AI, to compare the profiles of potential new buyers with those with similar credit profiles who have made similar purchases in the past. Based on that analysis, the platform presents new buyers with financing options for specific vehicles listed in their search results, Cox said.
Cox said estimates are informed by market data from the Kelley Blue Book vehicle valuation service, the DealerTrack platform for dealers, and other Cox systems that provide historical dealer transaction and contract information.
“It is this aggregated data that allows us to drive this automation,” said Ms. Mulroney of Cox.
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