The European used car market is set for a major transparency boost following the announcement of a new standardised grading system designed to harmonise cross-border trade.

The new system is intended to create a single grading language across continental Europe

The new framework is being created by the Car Remarketing Association of Europe (CARA) and was announced at the latest member meeting of the Vehicle Remarketing Association (VRA).

Gavin Shone, head of operations at Openlane, explained that work had been ongoing for four months, with stakeholders looking to similar schemes in the UK, United States and Japan.

“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.”

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 CARA presentation formed 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. For us, it has always been about a digital-first approach, one that prioritises accuracy, transparency and ultimately empowers both buyers and sellers to transact with confidence.”