carVertical Employs Blockchain to Fight Used Car Frauds
For many years, frauds in second hand cars pose a massive problem, which affects a considerable number of used cars worldwide. For example, “Forbes” estimates that odometer fraud cheats U.S. consumers out of $1 billion annually by exaggerating the value of used cars. The figure is even more impressive in Europe, where €9.6 billion is believed to be lost annually because of the same reason, says Tomáš Zdechovský, Member of the European Parliament.
Luckily, the situation is about to change soon.
carVertical announced its plans to build the first global & decentralized car history registry. The idea behind the headline is to gather as much maintenance-related vehicles’ data as possible, put it on the blockchain and make it public.
This type of approach eliminates the risk of information being changed, faked, rewritten or manipulated. It provides full transparency and, according to carVertical, builds trust. Transparency is needed for fraud detection – something that we illustrated in multi-billion digits above.
So the blockchain is expected to minimize the consequences of used cars’ frauds, saving billions for vehicle buyers. But to monetize it as a business, Matthew Jones of IBM points out particular case: a blockchain based system could enable <…> service events to get sent to a shared ledger that all parties had access to. Transparency of information about a vehicle’s real wear and tear would help the auto finance provider to more accurately gauge residual value of the vehicle as the lease approached its end of contract date.
carVertical, though, takes a wider approach. Having the blockchain car registry as a basis, the company is aiming to build a car wallet on top of it. carVertical’s wallet is a mobile gateway to virtually manage your car’s registration and maintenance records, perform insurance or technical inspection tasks. For the owner, this is an attractive possibility to emphasize the value of the car by leaving all the maintenance records on the blockchain. For carVertical, this is an efficient tool to monetize the business.
The scope of the project is impressive, especially having in mind those 80+ million new vehicles that are added to the world’s car fleet every year. carVertical is aiming to launch the initial version of its car wallet roughly after two years. By then, vehicle history reports and B2C solutions will be introduced.
In general, the evolvement of blockchain technology represents a bunch of new possibilities for automotive industry. Ranging from supply chain management to financial services, a variety of automotive industry verticals have been identified, where blockchain has the potential to become a game changer.
All major automakers, including Volkswagen, Toyota, Porsche and Daimler, have also taken steps to investigate or integrate blockchain technology. Experts predict, that by 2025, participants in the automotive sector are expected to spend approximately 0.6% of their total IT spend on blockchain technology, alone.