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National Auto Data Service puts car assessment online.

National Auto Data Service Puts Car Assessment Online

How much is any used car worth? Who cares? Have you, a family member or friend ever "totaled" a car? Who decided how much it was worth? What!, an online system? Read on.

Recent heavy rains in southern California contributed to a rash of automobile accidents. Ray Leo, staff appraiser for USAA Insurance Company, is overloaded with claims for wrecked cars that are being "totaled" (where the cost of repairs exceeds the current fair market value of the vehicle). He and the appraisers or adjusters on his staff walk a narrow line between being fair with the insured and being careful stewards over the resources of the company.

"Just how much is this recently wrecked 1987 Ford Aerostar XLT model worth?" he wonders. The myriad of makes, models, trim packages, and optional equipment makes consulting the ubiquitous "Blue Book" an imprecise technique at best.

Ray turns to his PC, calls up the "NADS" (National Auto Data Service) menu option, and within five minutes has carried out a Computerized Vehicle Profile (CVP) on the NADS computer in Milwaukie, Oregon. He gets a local and regional valuation profile for the vehicle that backs up his settlement offer. The owner of the popular mini-van is quite likely to accept the settlement offer because it is clear that Ray "did his homework" and is being fair. Fairness is the basis for successful insurance settlements involving wrecked cars.

Online and "Live" Staff Services

This scenario is played out several hundred times each day through the online and internal valuation facilities of NADS. More than two hundred insurance companies and principal car dealers (seeking fast and reliable potential trade in valuations) can dial into the NADS super micro computers where 1.8 million records of cars are kept and updated daily to maintain a 100-day rolling database for valuation analysis and reporting.

In-house, NADS has nearly one hundred workers inputting the car sales ads and carrying out detailed and complex valuation analytics based upon those records taken out of more than 200 publications from all over the western United States (including Alaska).

In addition to the direct online services, every day NADS staffers prepare hundreds of vehicle valuation reports triggered by appraisers and adjusters either faxing or phoning a two page Pre-Damaged Appraisal Sheet (PDAS) describing a vehicle to the "dispatch" or receiving center at NADS headquarters.

It All Began in Kensington

This beehive of activity, pledged to turn around valuation requests within twenty-four hours, has grown into a multimillion dollar business from a chance encounter I had in London in December of 1987 with Larry C. Nilson, whom I had known back in Portland, OR. At the time, I was in a hurry to get to the Dialog Update at the Kensington Gardens Hotel and gave Larry an "Exhibits" pass along with an invitation to "come by my booth and see online at work."

Two days dater Larry came and spent several hours in the exhibition hall, soaking up the form of online information services and the vastly differing subject contents at the many busy stands in the Novotel (was it still the Cunard then?). Before leaving, Nilson said, "This is an exciting world. It could help me make deals." (His business was then dealing in collectible cars.)

Unbeknownst to me, within the next three years, Larry returned home to Oregon, teamed up with a childhood friend, William J. Briggs (Bill), who shared a love and understanding of the car business, and NADS was born. In retrospect, with Larry holding a degree in animal husbandry and Bill having been a student of business and architecture, it was perfectly natural for them to gravitate to the online information industry. (Remember, Carlos Cuadra and Roger Summit have Ph.Ds in Industrial Psychology and Operations Research, respectively!)

NADS Files--Short Records, Many Links

The NADS data elements for each car are basic--year, make, model bodystyle, asking price, date and source of ad, and the telephone number of the seller. These are all coded into a 64-byte record that is unique to each vehicle entry. Probabilistic de-duping is done at the time of inputting through a rapid screen editing algorithm.

This basic record is stored in the cumulative database and kept for 100 days, building up to a 1.8 million record backfile. This is the "best guess" intuitive moving window of logical valuation picked by management. It coincides with the approximate capacity of the NADS system.

When a query is made on the system, it is matched with the stored text of trim and optional equipment lists. The most common items are then picked out by the system from the "typical" configuration model. An online user or valuation analyst adds or deletes the appropriate equipment, adds the mileage (from the PDAS form or from an actual sight reading), gives the local and/or regional market where the car is registered, and within a few seconds a Market Report (MR) or a Computerized Vehicle Profile (CVP) is ready.

The Market Report gives local or regional information on the vehicle, year, make, model, bodystyle, and price and phone number of the seller. Also included are the wholesale auction data, public retail ads, dealer retail ads, the local or regional market price trend graph, and the average vehicle pricing model.

NADS also offers arbitration services when insurance adjusters and policy holders can't agree on a settlement. In extreme cases NADS testifies in court as an expert witness regarding the valuation methodologies and resultant worth determination for a vehicle. The NADS system reports have been held by the courts to be documents of record valid for fair valuation of vehicles.

Users Want More

Ray Leo of USAA says, "I really like the fact that the CVP allows you to ask questions about option, engines, etc. while online. It saves lots of time. The NADS system, unlike other systems, always makes sense with the current market. The NADS personnel are the best."

NADS is moving rapidly to expand the capacity of their super micro computer systems and to undertake geographical expansion and the development of many significant new online services.

"We must continue working hard to stay ahead of competition and to live up to our users' growing expectations," remarked NADS President Bill Briggs.

Larry Nilson, NADS Vice President commented that the entire insurance appraisal and adjusting business has changed rapidly in the past few years. "Automobile appraising and adjusting used to be an art that required a minimum of several years to learn. Now companies are putting new and less experienced people into these responsible positions and making them rely upon systems like NADS instead of taking the years to develop their own |feel' of the profession. We see that trend continuing and increasing the shift from people's experience bases to computerized databased analytical systems."

NADS faces the future with optimistic vigor. Its founders and fast-growing customer base (80 percent growth rate for the last three years) see it growing several fold in the next decade.

PHOTO : William J. Briggs, (left) and Larry C. Nilson, founders of NADS.
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Author:Payne, Greg
Publication:Information Today
Date:Apr 1, 1991
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