Leave a used car online too long and it quietly loses money every single day. Dealers used to catch that with instinct and a spreadsheet. Now an algorithm does it instead, cutting prices before anyone notices a car has gone cold.
Dealers face rising vehicle prices, tightening affordability, and slim margins. Automated pricing could be one of the clearest tests of whether artificial intelligence (AI) can turn everyday retail discipline into profit. Patrick Janes, assistant vice president of vAuto Inventory Solutions at Cox Automotive, says dealers want technology that helps them sell more cars, protect margins, and free up managers’ time.
“Everybody’s looking for efficiencies,” Janes said during an Automotive News webinar. “AI is promising this ability to just do more with less․”
But algorithms are playing a bigger role in setting prices. That is opening a wider debate about where automated pricing should stop.
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Using AI and tracking data to charge different consumers different prices for the exact same products or services is deeply unfair. — Urs Buscke, Senior Legal Officer, European Consumer Organisation (BEUC)
Urs Buscke, Senior Legal Officer at the European Consumer Organisation (BEUC), argues automated pricing crosses a line. “Using AI and tracking data to charge different consumers different prices for the exact same products or services is deeply unfair. It is only possible because of constant commercial surveillance through tracking and profiling, and it can exploit an individual’s willingness to pay more than other people.”
Buscke said companies should not be allowed to charge higher prices simply because they know a person needs a specific product or service due to personal circumstances. Several US states have already started banning surveillance pricing. In the EU, the upcoming Digital Fairness Act should do the same, BEUC argues.
Affordability squeeze
Janes said the average list price of a used car today is above $27,000. He cited Carvana’s most recent quarterly report, which showed its average retail price rising by more than $4,000 between the first and second quarters of this year.
That makes pricing discipline more important as affordability grows tighter. Dealerships do not just want to know if a car’s opening price was right. They want to know if someone is watching it, adjusting it to demand, and getting ahead of a big discount before it becomes necessary. Janes said many dealers still wait too long before changing prices, then cut hard once a car has gone cold.
From manual pricing to auto-adjust
Cox Automotive frames automated pricing as an evolution, not a machine takeover. Janes calls it a “crawl, walk, run” model. The first stage works like cruise control. The dealer sets the rules: when the first price change happens, how large the discount should be, and how often the vehicle gets repriced. The system then adjusts the price within those guardrails.
The final stage is fully autonomous pricing. The system recommends an opening price, then manages everything from appraisal to inventory to sale, using data science to adjust the price continuously until the car sells. That does not mean the dealer’s judgement disappears.
Janes says Cox Automotive customers want to choose or approve the opening price. They also want to track and change prices as market conditions shift, while letting the system handle exceptions.
That is why guardrails matter. In a rules-based model, the system can pause a scheduled discount if market day supply suddenly jumps, or if a car starts attracting leads. It makes no sense to cut the price of a vehicle that has just become popular.
AI as an operational tool
The wider promise of automated pricing is not just better margins, but also efficiency. Used car managers often handle pricing, merchandising, vehicle preparation and reconditioning, and sales oversight all at once. If AI can price more efficiently, Janes said, staff can focus on other tasks that add value.
To take care of some redundant tasks, do it effectively, so your folks can wear more hats and get more things done. — Patrick Janes, Assistant Vice President, vAuto Inventory Solutions, Cox Automotive
“That is the payoff for AI, right? To take care of some redundant tasks, do it effectively, so your folks can wear more hats and get more things done,” Janes said.
Are dealers ready?
Janes said dealers should ask themselves several questions before deciding on automated pricing. How many vehicles have not had a price change in the last seven days? What is the average discount amount? How often in a month do they raise prices, and what is the average discount at the desk before a car sells? How much time would automating the process save?
These questions matter because automated pricing requires trust. It also requires a clear understanding of what the dealership is currently doing with pricing. For some dealers, this means rules-based automation. For others, it means a system that prices the car from the first recommendation all the way to the sale.
One thing is clear: given tight affordability and today’s used car prices, pricing can no longer be managed with a periodic manual review. The dealership of the future will still be a human-built institution. But the price on the windscreen, and online, will increasingly be set by an algorithm watching the market every day.
